Lorraine Williamson
Spain´s inflation eases again — at least on paper. Spain’s National Statistics Institute (INE) says annual inflation slowed to 2.3% in January 2026, down from 2.9% in December, and one tenth lower than its earlier estimate. The monthly figure also fell 0.4%.
But the number households feel most day-to-day is proving stubborn. Core inflation — which strips out more volatile food and energy — held at 2.6% for the third month in a row, underlining why many families still feel prices are “stuck high” even when headline inflation drops.
The main reason inflation fell: energy finally helped
The January slowdown was driven mainly by energy, with fuel and electricity providing the biggest downward pull compared with a year earlier. That is why the headline number can drop quickly — and why it can rise just as fast if energy turns again.
For readers, the key point is simple: cheaper energy can improve the overall figure even when the everyday basket — supermarket staples, services and household costs — does not fall in step.
What “core inflation” tells you about the real cost of living
Core inflation is watched closely because it captures the slower-moving prices that often shape budgets: services, everyday goods, and price rises that can become embedded.
INE’s final data shows core inflation unchanged at 2.6%, suggesting the underlying pressure in the economy has not eased at the same pace as energy-driven headline inflation.
Spanish media coverage has highlighted the same tension: inflation drops, yet many households still struggle to feel it in their weekly shop.
The EU comparison: Spain’s harmonised inflation falls to 2.4%
For international comparisons, Spain also publishes the EU-harmonised inflation rate (HICP/IPCA). INE puts that figure at 2.4% in January, down six tenths from December.
That matters because it is the benchmark used to compare inflation trends across the EU — and it feeds into how investors and policymakers read Spain’s direction of travel.
Why this matters now
Falling inflation is good news. It can support purchasing power and ease pressure on families. Yet when core inflation stalls, it is a reminder that the cost-of-living problem is not solved simply because fuel is cheaper this month.
The next few weeks will be watched closely for whether price pressure in everyday categories finally cools — or whether Spain remains in that frustrating zone where inflation is falling, but the bills still feel heavy.