Key facts
- Italian annual inflation rate reached 4.1% in September, up from 3.2% in August.
- The September inflation reading is the highest in three years.
- Energy costs, exacerbated by Middle East turmoil, are a primary driver of the inflation surge.
- Core inflation, excluding energy and fresh food, rose to 1.6% in September.
- French inflation also climbed to a multiyear high of 3.4% in September.
- The European Central Bank may consider further interest rate hikes due to rising energy prices.
Italy's inflation rate surged to 4.1% in September, a three-year high, driven by escalating energy costs amid turmoil in the Middle East, according to data from the official statistics agency ISTAT. This marks a significant increase from August's 3.2% annual rate and exceeds the median forecast of 3.8% from a Reuters survey of analysts.
The EU-harmonised consumer price index (HICP) rose 2.0% from the previous month. The domestic price index (NIC) also showed a substantial increase, up 0.7% month-on-month and 4.2% annually. Core inflation, which excludes volatile fresh food and energy prices, accelerated to 1.6% year-on-year in September from 1.4% in August.
Similar inflationary pressures were observed in France, where consumer prices rose 3.4% year-on-year in September, up from 2.6% in August. These multiyear highs in inflation across major European economies are putting pressure on the European Central Bank (ECB), with policymakers potentially considering further interest rate increases to combat rising energy prices. Prime Minister Giorgia Meloni faces challenges in addressing the cost of living for Italian families and businesses ahead of national elections next year.