Annual inflation rate remains stable at 2.2% in August

For the third consecutive month, annual inflation stands at 2.2%. The measures in the Resilienzpak relating to gas and electricity prices are contributing to a month-on-month fall in the aggregate energy price.

Chart 1: Annual inflation rate and contributions

Source: STATEC

In August 2026, energy prices in Luxembourg remained 5.8% higher than their level in August 2025, whilst continuing the downward trend observed in recent months. Compared with July, the aggregate energy price has thus fallen by 2.0% as a result of the measures agreed under the tripartite agreement on electricity and gas prices. Following the absorption of part of the network costs, the price of electricity has fallen by 13.9% compared with July. As for the price of gas, it fell by 14.3% month-on-month, following a reduction of 15ct/m³. Heating oil, however, rose by 5.2% month-on-month, despite the entry into force of the 15 ct reduction, also decided under the tripartite agreement. Fuel prices also rose compared with July: the price per litre of diesel rose by 12.3% and that of petrol by 0.8%. Year-on-year, the price per litre of diesel rose by 33.7% and that of petrol by 16.1%.

The aggregate for non-energy industrial goods rose by 1.1% compared with August 2025 and recorded the sharpest monthly increase (+3.1%) due to the end of the summer sales, which saw prices return to their usual levels. The ‘Clothing and footwear’ sector thus recorded a sharp monthly increase of 17.2%. Compared with August 2025, clothing prices rose by 1.0%. Other categories were also affected by the end of the sales, notably household appliances, jewellery and watches, as well as personal and household goods. Excluding the effect of the sales, the monthly change in the aggregate for non-energy industrial goods would have been +0.5%.

Food prices, including alcoholic drinks and tobacco, rose by 1.6% year-on-year in August 2026. Certain categories stood out with particularly sharp increases, notably fruiting vegetables (+12.5% year-on-year), frozen fruit (+6.3%) and chocolate (+5.6%). Conversely, prices for stone fruit (-3.8%), vegetable oils (-3.2%) and citrus fruits (-2.2%) were down compared with August 2025.

Prices for services rose by 2.6% year-on-year, compared with 2.4% in July. This acceleration is due to the rise in fees for nurseries and after-school care centres, which increased by 1.8% compared with August 2025. With the summer season in full swing, package holiday prices rose by 3.5% month-on-month and by 0.7% compared with August 2025, whilst airfares rose by 5.8% compared with July and by 3.6% year-on-year.

Table 1: Price changes for the four main IPCN aggregates

Source: STATEC

The annual inflation rate remained stable at 2.2% in August. The all-items index excluding energy rose from 1.8% to 1.9%. The all-items index for August, expressed on a base of 100 in 2025, stood at 103.25 points. The half-yearly average of the index, linked to the base date of 1 January 1948, rose from 1,049.47 to 1,054.27 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 September 2026 will be published on 7 October 2026, following the Index Committee’s monthly meeting. A preliminary estimate of the annual inflation rate will be published on 30 September 2026.