The eurozone's four largest economies published their October inflation figures on Friday, and they moved in opposite directions, according to the national statistics offices of Italy, Spain, France and Germany. Italy recorded the sharpest rise, Spain held steady, France accelerated, and Germany was the only one of the four where inflation fell.
Source: Euronews
In Italy, annual inflation jumped to 5.4% in October from 4.2% in September, preliminary figures from the national statistics office Istat showed — above the 4.6% economists had expected and back at its August 2023 level, the highest in more than three years. On the harmonised EU measure used to compare member states, Italian inflation reached 5.6%. Consumer prices rose 0.9% in October from September alone.
Energy did most of the damage in Italy. Istat said energy prices were 31.4% higher than a year earlier, up from 22.6% in September, still shaped by the international geopolitical backdrop. Regulated energy prices rose 59.5% on the year, goods prices rose 7.5%, the cost of the so-called shopping cart of everyday food and household items accelerated to 2.5% from 1.5%, and core inflation rose to 2.0% from 1.6%, ING noted in its analysis of the Istat release.
Germany was the exception. Inflation there slowed to 2.8% year-on-year in October from 3.3% in September, preliminary data from the federal statistics office showed on Friday, below the 3.1% forecast in a Reuters poll of analysts. Energy price growth slowed to 12.2% from 14.9%, core inflation fell to 2.1% from 2.4%, and consumer prices fell 0.2% from September.
Source: Reuters
The main reason was a cut in fuel taxes that took effect on October 1 and runs until the end of the year, lowering the energy tax on petrol and diesel by about 14 cents a litre — up to 17 cents a litre once VAT is included. Silke Tober of the Macroeconomic Policy Institute (IMK) said the fuel tax cut was decisive in bringing the headline rate down.
Spain's inflation held at 4.9% in October, the same rate as September, according to a flash estimate from the National Statistics Institute (INE), keeping it near its highest level since early 2023, with core inflation at 3.1%. In France, inflation rose to 3.4% from 3.1%, its highest since January 2024, statistics office Insee said, as energy prices rose 24.1% on the year — a fourth consecutive month of acceleration driven by gas and petroleum products.
Analysts warned that Germany's relief may not last. Commerzbank chief economist Joerg Kraemer said it was too early to sound the all-clear and that inflation would probably be above 3% again around the turn of the year, while ING economist Carsten Brzeski said he saw no sign yet of indirect effects from higher energy prices spreading through the wider economy. The Bundesbank expects inflation to pick up noticeably early next year when the fuel tax cut expires.
The four national readings come ahead of the eurozone-wide flash inflation estimate due on Wednesday. Economists polled by Reuters expect bloc inflation of about 3.9% in October, slightly above September's 3.8% and nearly double the European Central Bank's 2% target. The ECB left interest rates unchanged on Thursday but clearly hinted at another hike in December, warning that high and rising energy costs are fuelling inflation risks.
Source: Reuters
All four economies are facing the same energy-price surge linked to the Middle East war and the Strait of Hormuz crisis. Whether governments cushion it — as Germany did with a fuel tax cut — or let it pass through to households, as in Italy, now decides how fast prices rise for ordinary families, and how much pressure stays on the ECB to raise rates again in December.