Inflation rate triggers indexation, wages, pensions to increase from August.
Luxembourg's annual inflation rate rose to 1.5% in July, triggering an automatic increase in wages and pensions.
Month-on-month, the national consumer price index declined by 0.7%, according the Luxembourg's national statistics bureau Statec.
The monthly drop from June was driven by the summer retail sales, such as a 14% price decline in the price of clothing and footwear.
However, stripping out sales and petrol products, prices for other goods and services rose by 0.3%.
Holiday prices were up by 7.2%, while the costs of flights increased by 21.5% compared with June as the summer holidays enter full swing.
As a result of the July inflation numbers, workers in Luxembourg will see their wages increase by 2.5% due to indexation – which keeps earnings in line with inflation – from 1 August.