September Consumer Price Index Drops, Fueling Interest Rate Cut Speculation
Translated & summarized from Srugim by baba
Israel's Consumer Price Index decreased by 0.5% in September 2026, potentially leading the Bank of Israel to cut interest rates. Housing prices also declined, dropping 0.6% in July-August and 1.8% year-over-year. Significant monthly price drops occurred in culture, entertainment, and transportation, while fresh vegetables saw a notable increase.
The story in 6 lines · by baba
- The Israeli Consumer Price Index fell by 0.5% in September 2026, raising expectations of an interest rate cut.
- Overall housing prices decreased by 0.6% in July-August 2026 compared to the previous two months.
- The annual housing price index showed a decline of 1.8% from July-August 2025 to July-August 2026.
- The North region experienced the largest monthly drop in housing prices at 1.5%.
- Culture and entertainment prices fell by 2.7% and transportation by 2.5% in September.
- Fresh vegetable prices surged by 6.6% in September.
The Israeli Consumer Price Index (CPI) fell by 0.5% in September 2026 compared to August 2026, a development that could prompt the Bank of Israel to lower interest rates. This monthly decrease follows a broader trend of declining housing prices.
In July-August 2026, the housing price index decreased by 0.6% compared to the previous two months, with new apartments seeing a 0.4% drop. Regionally, Haifa experienced a 0.4% rise, while other districts saw declines, led by the North with a 1.5% decrease, followed by Tel Aviv (0.9%), Central (0.7%), Jerusalem (0.3%), and the South (0.1%).
Annually, from July-August 2025 to July-August 2026, the overall housing price index fell by 1.8%. All districts recorded annual price drops: Central (-2.7%), Tel Aviv (-1.9%), South (-1.5%), Haifa (-1.4%), North (-0.8%), and Jerusalem (-0.2%). The annual index for new housing prices decreased by 0.4%.
Over the past twelve months, from September 2025 to September 2026, the CPI rose by 1.6%. Notable price decreases were observed in culture and entertainment (-2.7%), transportation (-2.5%), clothing and footwear (-0.9%), and food and home furnishings (each -0.4%). Conversely, prices increased for fresh vegetables (+6.6%), education services (+0.8%), and rent (+0.4%).
