Spain’s Consumer Price Index (CPI) rose 0.7% in August from July, exceeding the 0.6% market expectation, while the annual inflation rate increased to 2.4% from 2.1% in July, according to the National Statistics Institute (INE) flash estimate. Higher fuel and food prices contributed to the annual increase, while economists identified energy costs and core services as possible drivers of the monthly rise. The stronger reading adds to the European Central Bank’s (ECB) case for caution on further interest-rate cuts after it reduced its deposit rate from record highs earlier this year. Spanish households and businesses continue to face cost pressures, although government measures to cap food prices and reduce transport costs have offered some relief. The euro held steady after the release, while Spanish government bond yields edged higher as some economists brought forward expectations that the ECB could keep rates unchanged at its September meeting.