Annual inflation falls to 2.7% in October

Annual inflation fell slightly, from 2.9% in September to 2.7% in October, due to a smaller contribution from service prices.

Chart 1: Annual inflation rate and contributions

Source: STATEC

Prices for services rose by 2.8% year-on-year, compared with 3.4% in September. This slowdown is due to a sharp seasonal fall in fees for nurseries and after-school care centres, which were down 6.0% compared with October 2025. Airfares have also seen a sharp fall of 15.1% compared with September 2026, and are slightly lower year-on-year (-1.5%). Package holidays, meanwhile, fell by 2.0% compared with the previous month, whilst remaining 11.1% higher year-on-year. Conversely, certain categories of services recorded increases, such as passenger transport by taxi, which rose by 3.3% month-on-month, and veterinary services, up by 3.1%.

The overall energy index shows an annual increase of 13.2%, but is down by 0.2% compared with the previous month. The price of heating oil has fallen by 0.2% compared with September, whilst the price of diesel has fallen by 0.3% and petrol has fallen by 0.4% month-on-month. However, year-on-year, these energy products remain well up: heating oil is up by 64.8%, diesel by 45.1% and petrol by 24.6%. In October, a 5.9% increase was also observed for charging electric cars at public charging points, compared with September 2026. By contrast, gas and electricity prices remained unchanged.

Food prices, including alcoholic drinks and tobacco, rose by 1.5% year-on-year in October 2026. Certain categories stood out with particularly sharp increases, notably vegetables (+6.3%), fresh meat (+3.3%) and bread (+2.8%). Conversely, prices for fruit (-2.0%) and pasta (-4.1%) were down compared with October 2025. Wine prices also fell by 1.6% year-on-year, whilst the price of cigarettes rose by 5.6% compared with October 2025.

The aggregate for non-energy industrial goods recorded the lowest annual increase (+0.6%). Price rises were observed for furniture, which rose by 2.9% year-on-year, and for computers and tablets (+6.9%). New cars, which account for 5.7% of the IPCN in 2026, rose by 0.8% year-on-year, which had a noticeable impact on the overall figure. Conversely, electrical personal care appliances fell by 3.2% compared with September 2026, and by 2.5% year-on-year.

Table 1: Price changes for the four main IPCN aggregates

Source: STATEC

The annual inflation rate fell to 2.7% in October, down from 2.9% in September. The all-items index excluding energy fell from 2.2% to 1.3%. The all-items index for October, expressed on a 2025 base of 100, stood at 103.37 points. The half-yearly average of the index, linked to the base date of 1 January 1948, rose from 1,058.56 to 1,059.80 points. The next indexation will be triggered when the value of 1,064.75 is reached; the cumulative rise in prices therefore stands at 2.02% since the last index adjustment.

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 November 2026 will be published on 7 December 2026, following the monthly meeting of the Index Committee. A preliminary estimate of the annual inflation rate will be published on 30 November 2026.