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    Spain’s preliminary CPI for August remains at 2.7%, while core inflation increases to 2.4%

    by VT Markets
    /
    Aug 29, 2025
    The latest data from INE shows that Spain’s Consumer Price Index (CPI) for August rose by 2.7% compared to last year. This matches July’s rate and is slightly below the expected 2.8%. The Harmonised Index of Consumer Prices also remains steady at 2.7%, as predicted.

    Core Annual Inflation Update

    Core annual inflation has increased to 2.4%, up from 2.3% in July. This change could affect future economic evaluations and policies. The European Central Bank (ECB) is not expected to change its rate outlook for now. The recent inflation numbers from Spain support the current economic outlook, with the headline figure steady at 2.7%. This stability means that the ECB likely won’t feel pressured to make any quick decisions regarding interest rates in the near future. Policymakers are expected to maintain their cautious approach. The slight rise in core inflation to 2.4% is the key detail to monitor. This persistent pressure on prices is the same factor that caused the ECB to hold back during the 2024 cycle. As a result, there’s little chance of a surprise shift at the September meeting.

    Outlook for Traders

    For traders, this stable outlook indicates that significant volatility is unlikely. Strategies like selling premium through short strangles on Euro Stoxx 50 options or writing covered calls on European stocks could be appealing. With the VSTOXX index recently near multi-month lows around 14, this environment favors trades that benefit from ongoing sideways movement. In the rates market, there’s no strong reason to anticipate major changes in short-term interest rate futures, such as EURIBOR. The yield on the German 10-year bund remains stable at around 2.5%, suggesting that the market believes the ECB will stay put. Any trading positions should reflect this expectation of policy stability for the remainder of the third quarter. Create your live VT Markets account and start trading now.

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