Iceland inflation climbs to 5.9% as fuel prices jump

Iceland’s 12-month inflation rate rose to 5.9% in September from 5.6% in August, mbl.is reported, citing Statistics Iceland. Landsbankinn’s research department had forecast a rate of 5.8%.

The consumer price index stood at 697.3 points, up 0.39% from the previous month. The index excluding housing rose 0.40% to 556.0 points.

Diesel prices increased by 18.1% and petrol prices by 16.1%, while international airfares fell by 11.7%.

A temporary cut in value-added tax on diesel and petrol expired on September 1, raising the rate from 11% to 24%. Statistics Iceland estimated that the tax change added about 0.32 percentage points to the consumer price index. Without the tax increase, diesel would have been 5.7% more expensive than a month earlier and petrol 3.9% more expensive.

Over the past 12 months, the consumer price index excluding housing rose by 5.7%. The September index will be used for indexation in November 2026.