Italy recorded the highest inflation rate among the eurozone’s four largest economies in October, as energy costs pushed annual price growth to 5.4%. France also saw inflation accelerate, while Spain’s rate was unchanged and Germany’s fell after a temporary fuel-tax reduction.
The figures provide an early indication of the pressure facing the eurozone economy before Eurostat publishes its flash estimate for the currency bloc. They also sharpen the debate over whether the European Central Bank will raise interest rates again at its December meeting.
October inflation comparison across the four largest economies
Preliminary national data showed a clear difference in annual inflation rates:
- Italy: 5.4%, up from 4.2% in September
- Spain: 4.9%, unchanged from September
- France: 3.4%, up from 3.1%
- Germany: 2.8%, down from 3.3%
The harmonised index used for comparisons across the European Union placed Italy at 5.6%, France at 3.8% and Spain at 4.9%. Germany’s comparable figure was not included in the source data.
Although all four countries are dealing with higher energy costs, their inflation paths differ because of national energy pricing, tax measures, consumption patterns and the strength of domestic demand.
Italy sees the sharpest increase as energy costs spread
Italy’s preliminary inflation figure, published by national statistics office Istat, was significantly higher than economists had expected. It represented the country’s highest annual rate since August 2023.
Energy prices rose 31.4% compared with October 2025, accelerating from 22.6% in September. Regulated energy prices increased particularly sharply, rising 59.5% year on year. They also climbed 18.8% in October alone.
The impact was becoming visible beyond household energy bills. The cost of a frequently purchased basket of food, household and personal-care products increased 2.5%, compared with 1.5% the previous month. Unprocessed food inflation reached 7.5%, while transport services rose 3.1%.
Italy’s core inflation rate, which excludes energy and fresh food, increased from 1.6% to 2%. The combination of faster price growth and no economic expansion in the third quarter adds to concerns about pressure on household spending.
Spain’s inflation rate holds steady
Spain’s annual inflation rate remained at 4.9%, according to a flash estimate from the National Statistics Institute. Prices nevertheless rose 0.6% between September and October.
The stable annual figure was partly linked to fuel prices being lower than a year earlier, when petrol and diesel costs were rising. That effect was partly offset by higher gas tariffs.
Underlying inflation, excluding energy and unprocessed food, remained at 3.1%. Spain’s harmonised inflation rate eased slightly to 4.9% from 5%.
The inflation data came as the Spanish economy continued to show stronger momentum than the other major economies in the comparison. Gross domestic product grew 0.6% in the third quarter, supported by domestic demand.
France faces rising prices alongside weaker output
French inflation increased to 3.4% in October, according to national statistics office Insee. That was the highest rate since January 2024 and above the 3.2% expected by economists.
Energy prices rose 24.1% year on year, marking a fourth consecutive month of acceleration. Gas and oil products were key contributors. Services inflation also increased to 2.7%, with hotel and transport prices contributing to the rise.
France’s economy contracted by 0.1% in the third quarter. The combination of rising prices and weak output has led economists to describe the situation as showing stagflationary tendencies. However, the term refers to a broader economic pattern rather than a formal statistical classification.
Germany’s inflation falls after fuel-tax cut
Germany was the only one of the four economies to report a decline in annual inflation. Destatis said the rate fell to 2.8%, below the 3% forecast.
A temporary fuel-tax reduction that began on 1 October was the main factor behind the fall. The measure is scheduled to continue until the end of the year. Energy inflation slowed to 12.2% from 14.9%, while consumer prices fell 0.2% compared with September.
Core inflation also eased, dropping from 2.4% to 2.1%. Economists have cautioned that the improvement may not last if fuel duties rise again after the temporary measure ends.
What the figures mean for the ECB
The European Central Bank kept its deposit facility rate at 2.5% at its October meeting, following an increase in September. Policymakers discussed another rise but agreed to wait.
The latest inflation data leave the ECB facing competing pressures. Higher energy costs and signs that inflation may be spreading into food, transport and services could support another increase. At the same time, weak or falling output in Italy and France argues for caution because higher borrowing costs could further restrain demand.
One estimate cited before the Italian data put eurozone inflation at 3.7% for October. Following the stronger-than-expected Italian result, another forecast was raised to 4%, compared with 3.8% in September. Both estimates would be well above the ECB’s 2% inflation target.
The ECB’s next decision will depend on the full eurozone data, including the flash estimate from Eurostat and subsequent assessments of core inflation, wages, economic activity and energy prices. A December rate increase remains possible, but the national figures do not make the outcome certain.
Why the October data matter
The figures show why a single eurozone interest-rate policy can be difficult to calibrate. Germany’s inflation decline was helped by a national tax measure, while Italy’s rate rose sharply as energy costs moved through household budgets. Spain’s stronger growth has supported demand, whereas France and Italy are experiencing weaker economic conditions.
For households, the most immediate concern is that energy pressure may continue to affect food, transport and services. For governments, the data highlight the tension between temporary support measures and the risk that inflation remains elevated. For the ECB, the central question is whether the current shock will fade or become embedded in broader price-setting behaviour.
Conclusion
Italy had the highest inflation rate among the four largest eurozone economies in October, while France also recorded an increase. Spain’s rate held steady and Germany benefited from a temporary fuel-tax cut. The next major milestone is Eurostat’s eurozone estimate, which will help determine whether the European Central Bank considers another interest-rate increase in December necessary.