Icelandic labour confederation warns inflation may rise in November

Annual inflation in Iceland could rise in November if discount days do not affect prices as they did last year, the Icelandic Confederation of Labour (ASÍ) said, according to mbl.is. The confederation expects inflation to begin easing from December.

Inflation was 5.9% in October, unchanged from the previous month, while the consumer price index rose 0.44% month on month.

ASÍ said the November figures are uncertain because the consumer price index fell in November 2025, when discount days had a substantial effect on the measurement. If discounts have less impact this year, annual inflation could increase as last November’s price decline drops out of the 12-month comparison.

In its latest economic forecast, ASÍ expects average inflation of 4% in 2027. It says inflation could average 4.3% if its more pessimistic scenario for oil prices materialises. The forecast also takes into account commitments by the government and municipalities to limit fee increases to 2.5% at the start of next year, with the same request to be made to publicly owned companies.

Housing costs rose less in October than in recent months. Paid rent increased 0.5% month on month and imputed rent rose 0.4%. ASÍ said it was too early to tell whether this reflected weaker pressure in the housing market. Housing costs have risen 6.1% over the past year, including increases of 6.4% in electricity prices and 10.6% in heating prices.