Iceland's inflation rose to 5.2% in February 2026, the highest in 16 months, driven by food, clothing, and transport costs.

Iceland's inflation held steady at 5.2% in February 2026, the highest in sixteen months, with core inflation at 4.5%. Food and non-alcoholic beverages rose 5.2% annually, clothing and footwear up 3.7%, and transport costs climbed 4.2%, while furnishings declined 0.8%. Monthly prices increased 0.9%, up from 0.4% in January. Global markets reacted to biotech FDA decisions, central bank rate moves, corporate earnings, and major deals, including a $3.4 billion real estate acquisition and a $575 million wildfire settlement.