The latest numbers released today by Statistics Iceland indicate that the annual inflation rate now rests at 7.6%.
The government has introduced measures to fight inflation over the past few months, including increasing security pensions, curtailing salaries for senior officials, and the postponement of several construction projects.
Earlier this year, Íslandsbanki forecast that inflation rates would drop to 8% by year-end.
Some of the reduction can be accounted for by summer clearance sales, which have partially driven down the costs of some consumer goods, such as clothing and consumer electronics.
Clothes and shoes have decreased in price by 7.7 per cent, while furniture and household appliances have decreased by 2.4 per cent.
Sales have been relatively strong in the past three years, which can be attributed to the high demand during COVID for such products.
The cost of housing in private homes decreased by 0.7 per cent, but airfares increased by 13.9 per cent. Additionally, the wage index has increased by 1.1 per cent in the last twelve months, and by 10.9 per cent over the past twelve months.
The Monetary Policy Committee is set to reassess interest rates on August 23, and it is possible that these latest developments may be taken into consideration.