Inflation is rising again across the world’s wealthiest economies, largely because of higher energy costs.
Across OECD countries, prices rose by 4.3 per cent in the year to August 2026, up from 4.1 per cent in July.
Inflation increased in 23 countries, while just three recorded a fall. Energy prices were the main reason for the increase. Fuel and power costs were 13.6 per cent higher than a year earlier, up from 11.6 per cent in July.
Of the 37 OECD countries with available data, 28 saw energy inflation rise. Australia, Belgium, Denmark, Italy, Spain and Türkiye recorded particularly large increases.
Among the G7 countries, overall inflation remained relatively stable at 3.1 per cent in August, compared with three per cent in July.
However, energy inflation across the G7 climbed to 14 per cent. Every country except Japan recorded double-digit energy inflation. Japan was the exception, with energy prices falling compared with a year earlier due to government subsidies.
In the UK, Italy and France, higher energy costs helped push overall inflation up. However, falling food inflation helped offset some of the impact of rising energy prices across the G7.
Food inflation fell to 1.9 per cent, its lowest level since October 2024. Food price growth slowed across the G7 overall, although France and the UK did not see a decline.
Inflation also rose across the euro area, from three per cent in July to 3.2 per cent in August.
Again, energy was the main driver, with energy inflation reaching 14.3 per cent, its highest level since January 2023. Food and core inflation remained broadly stable.
Early estimates from Eurostat suggest the situation worsened considerably in September. Flash figures point to headline inflation in the currency bloc hitting 3.8 per cent, its highest reading since September 2023 and a jump of 0.6 percentage points in a single month.
Energy is again the culprit. September’s preliminary data puts energy inflation at a staggering 18.8 per cent, while underlying price growth, stripping out food and energy, remained broadly unchanged at 2.5 per cent.
Beyond the advanced economies, the G20 as a whole saw inflation rise to 4.1 per cent in August, up from 3.9 per cent the previous month.
India recorded one of the sharper increases, with prices climbing 0.4 percentage points to reach 5.0 per cent. Both China and Indonesia posted gains of 0.3 percentage points, bringing their respective rates to 0.8 per cent and 3.2 per cent.
Argentina and Brazil bucked the trend with falling inflation, while Saudi Arabia and South Africa remained largely unchanged.
One area of relief across the OECD was the grocery bill. Food inflation dropped to 2.8 per cent in August, down from 3.2 per cent in July, marking its lowest point since July 2021.
Core inflation, which excludes both food and energy, held firm at 3.6 per cent for a third consecutive month.
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