Annual inflation rate remains stable at 2.2% in July

Annual inflation in July 2026 remained stable at 2.2 per cent, reflecting both a lower contribution from energy and a higher contribution from industrial goods compared with June.  

Chart 1: Annual inflation rate and contributions

Source: STATEC

In July 2026, energy prices in Luxembourg remained 7.1% higher than their level in July 2025, whilst continuing the downward trend observed in recent months. Compared with June, the energy aggregate thus fell by 0.4%. This decrease is mainly due to the measures agreed under the tripartite agreement, which provide for a reduction of 5 centimes per litre for diesel and petrol. Consequently, fuel prices recorded a monthly fall of 1.4%, but remain 15.8% above the level seen in July 2025. The price per litre of diesel fell by 2.3% month-on-month, whilst that of petrol fell by 0.7%. Had it not been for the government measure, fuel prices would have risen by 1.5% month-on-month. The price of heating oil rose by 1.3% compared with June and showed a marked increase of 30.4% compared with July 2025. Gas and electricity tariffs, meanwhile, remained unchanged in July.

Food prices, including alcoholic drinks and tobacco, rose by 1.5% year-on-year in July 2026. Certain categories stood out with particularly sharp increases, notably fruit vegetables (+15.8% year-on-year), frozen fruit (+9.6%) and chocolate (+6.0%). Conversely, prices for pasta (-5.0%), vegetable oils (-3.2%) and ice cream (-2.9%) were down compared with July 2025.

Prices for services rose by 2.4% year-on-year, compared with 2.5% in June. This slight slowdown is mainly due to a seasonal fall in fees for nurseries and after-school care centres, which were down 9.9% on the previous month. Discounts were also observed for internet access services (-7.4% month-on-month) and for goods delivery charges (-4.9%). However, the start of the school holidays led to seasonal increases in certain tourism-related act Package holidays rose by 15.0% compared with June and by 3.5% year-on-year, whilst airfares increased by 13.3% month-on-month and by 4.1% compared with July 2025.

Table 1: Price changes for the four main IPCN aggregates

Source: STATEC

The annual inflation rate remained stable at 2.2% in July. The all-items index excluding energy rose from 1.7% to 1.8%. The all-items index for July, expressed on a base of 100 in 2025, stood at 102.00 points. The half-yearly average of the index, linked to the base date of 1 January 1948, rose from 1,044.80 to 1,049.47 points. The next indexation will be triggered when the value of 1,064.75 is reached.

TABLE 2: Price changes in the 13 divisions of the IPCN

Source: STATEC

Chart 2: Evolution of the Price Index and Inflation in Luxembourg

The chart shows the parallel evolution of the price index (yellow line) and the annual inflation rate (blue line) in Luxembourg since 2016. The horizontal lines indicate the various index thresholds corresponding to index tranche levels. The index gradually moves towards the current threshold, while inflation fluctuations explain periods of faster or slower progression.

The results of the index for August 2026 will be published on 4 September 2026, following the Index Committee’s monthly meeting. A preliminary estimate of the annual inflation rate will be published on 31 August 2026.