The Spanish inflation offers in August two very different photographs. The leading indicator of the general CPI reaches 4.3% year-on-year, compared to 3.6% in July, while the underlying inflation moves in the opposite direction and drops by one-tenth, to 2.9%.
The difference is relevant to determine what is behind the new inflationary episode. While the general index incorporates all goods and services included in the basket, the underlying rate excludes unprocessed foods and energy products, two components characterized by greater volatility.
The evolution of August thus shows that the increase that drives the CPI is not being transferred, for now, with the same strength to the rest of the prices. Fuels appear precisely among the main responsible for the acceleration of the general indicator.
What is underlying inflation and why does it matter
Underlying inflation seeks to offer a more stable picture of price evolution by excluding those components capable of experiencing sharp fluctuations in relatively short periods.
This allows distinguishing between an episode fundamentally caused by factors such as energy and another in which the increases begin to spread more generally across less volatile goods and services.
It does not mean that the excluded products lack importance for households. Gasoline, diesel, or fresh foods have a direct impact on the family budget, but removing them from the indicator makes it easier to analyze whether inflationary pressure is penetrating other parts of the economy.
The gap between the general CPI and the underlying one widens to 1.4 points
In July, the CPI was at 3.6% and the underlying inflation at 3.0%, a distance of six-tenths.
In August, that separation increases to 1.4 percentage points. The general rate advances seven-tenths while the underlying decreases by one, producing clearly opposite movements between both indicators.
The divergence helps interpret the jump in the CPI: if the pressure were spreading uniformly across the basket, one would also expect a significant acceleration of the underlying. The advance published this Friday does not show that behavior.
Fuels explain a good part of the difference
The INE identifies fuels and lubricants for personal vehicles among the elements that most influence the acceleration of the annual rate. Their prices rise this August, while during the same month in 2025 they had decreased.
Precisely, energy products are excluded from the calculation of core inflation. Their behavior can quickly raise the general CPI without initially producing an equivalent movement in the indicator that measures less volatile pressures.
Food and non-alcoholic beverages also contribute to the year-on-year increase, although to a lesser extent. The INE explains that their prices decrease less than in August of the previous year.
The core remains around 3%
The evolution of recent months shows relatively stable core inflation. In March it was at 2.9%, dropped to 2.8% in April, rose to 3.0% in May, decreased to 2.9% in June, and returned to 3.0% in July.
The advance in August brings it back to 2.9%, keeping it within a narrow range despite the strong movement experienced by the general CPI.
This stability does not mean that inflationary pressures have disappeared. A rate close to 3% still implies relevant price increases, but does not currently show an acceleration comparable to that of the general index.
Does this mean that inflation is not becoming entrenched?
The data from a single month does not allow for a definitive conclusion on how prices will evolve over the next quarters. However, the combination observed in August does not show a simultaneous acceleration of general and core inflation.
This nuance is especially important in the face of an energy shock. The risk arises if the initial increase in fuels and energy ends up being passed on to transportation, production, and service costs and, subsequently, to a broader range of prices.
For this reason, the upcoming data will be especially relevant. If core inflation begins to rise persistently, it would increase the evidence of a transmission of energy pressures to the rest of the economy; if it remains stable or continues to moderate, it would reinforce the interpretation of a more concentrated episode.
The comparison with 2025 shows a much greater advance of the general CPI
In August 2025, core inflation was at 2.4%. Twelve months later it reaches 2.9%, an increase of five tenths.
The general CPI has covered a considerably greater distance: it went from 2.7% in August 2025 to the current 4.3%, a difference of 1.6 percentage points.
The comparison reinforces the current divergence. The general price level accelerates with much more intensity than the component designed to isolate the most volatile items.
Why this data matters for interest rates
Core inflation is a useful reference for assessing the persistence of price pressures, although central banks analyze a much broader set of indicators before making decisions.
The current situation presents two different signals: a general CPI above 4% reflects significant pressure on the cost of living, while the moderation of the core indicates that this movement is not reproducing with the same intensity in the less volatile components.
The future evolution will depend, among other factors, on how long the energy pressure lasts and whether it ends up spreading to other prices. That possible transmission will be one of the keys to determining whether the summer inflation spike is transitory or takes on a more persistent character.
The next months will be the true test
The figures known this Friday still correspond to the leading indicator for August. The definitive data will allow us to verify whether these rates are confirmed and will provide a more detailed breakdown of the evolution of the different consumption groups.
Even more important will be to observe what happens in September and during the autumn. If the distance between the general CPI and the core starts to close because the latter accelerates, concern about more widespread inflation would increase.
For now, the advance leaves a cautious conclusion: general inflation skyrockets to 4.3%, but core inflation does not accompany that movement and falls to 2.9%. The spike is intense for households' wallets, but the data still do not show an equivalent acceleration in the most stable core of prices.