Germany, France, Italy and Spain: Where was inflation highest in October?
Piero Cingari
6 min read
The eurozone's four largest economies published fresh inflation data on Friday, offering an early read on what is shaping up to be another hot month for price pressures across Europe.
The October's inflation ranking was clear.
Italy came out on top, with prices rising 5.4% from a year earlier. Spain followed at 4.9%, France at 3.4% and Germany at 2.8%.
The more telling story, however, is the direction.
Inflation accelerated sharply in Italy and France, held steady in Spain and fell in Germany, even though all four major economies are dealing with the same surge in energy costs.
So, why are the same pressures producing such different bills, and what does it mean for the European Central Bank?
Italy: Why did prices jump the most?
Italian inflation rose to 5.4% in October from 4.2% in September, according to preliminary figures from national statistics office Istat.
That brings it back to its August 2023 level, and well above the 4.6% economists had expected.
Under the harmonised measure used to compare countries across the EU, Italian inflation reached 5.6%.
Energy did most of the damage. Istat said energy prices were 31.4% higher than a year earlier, up from 22.6%, still shaped by the international geopolitical backdrop.
Regulated energy, the tariffs that are not set freely by the market, rose 59.5% year on year, more than double the previous month's rate. Prices in this category climbed 18.8% in October alone.
The pressure is also reaching supermarket shelves.
The so-called "shopping trolley," a basket of food, household and personal care products Italians buy most often, rose 2.5%, up from 1.5%. Unprocessed food prices accelerated to 7.5%, and transport services to 3.1%.
Core inflation, which strips out energy and fresh food to show underlying price trends, rose to 2% from 1.6%.
For Italian households, the timing is difficult. Istat also reported on Friday that the economy did not grow in the third quarter.
Melanie Debono, senior Europe economist at Pantheon Macroeconomics, wrote in a note that the breakdown due next month is likely to show the energy shock weighed more heavily on consumer spending than monthly retail figures had suggested.
Spain: Why did inflation stop rising?
Spain's inflation rate held at 4.9% in October, the same as September, according to a flash estimate from the National Statistics Institute (INE). That keeps it near its highest level since early 2023.
Prices still rose 0.6% compared with September. Annual inflation stayed flat largely because fuel was cheaper than last October, when petrol and diesel prices were climbing. Higher gas tariffs offset part of that relief.
FILE. People walk among tents set up by protesters at the Puerta del Sol square demanding stronger laws to protect renters in Madrid, Spain, 17 Oct. 2026 - AP Photo/Bernat Armangue
Underlying inflation, which excludes energy and unprocessed food, held at 3.1%. The harmonised rate eased slightly to 4.9% from 5%.
Spain is also the bloc's strongest big economy at the moment.
Joe Nellis, head of economic research at advisory firm MHA, noted in emailed comments that Spanish output grew 0.6% in the third quarter, supported by stronger domestic demand.
France: Is stagflation setting in?
In France, inflation rose to 3.4% from 3.1%, its highest since January 2024, statistics office Insee said. Economists had expected 3.2%.
Energy prices rose 24.1% year on year, accelerating for a fourth consecutive month, driven by gas and oil products. Services inflation, the largest part of the French basket, picked up to 2.7% as hotel and transport prices rose.
On the harmonised measure, French inflation reached 3.8%.
The figures came alongside data showing the French economy shrank 0.1% in the third quarter.
"France faces stagflation," Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said in a report.
The term describes rising prices combined with a stagnant economy.
He expects French harmonised inflation to rise above 4% by November.
Germany: Why did inflation fall?
Germany was the exception.
Inflation dropped to 2.8% from 3.3%, below the 3% economists had forecast, the Federal Statistical Office (Destatis) said.
The main reason was a cut in fuel taxes that took effect on 1 October and runs until the end of the year. Energy inflation slowed to 12.2% from 14.9%. Consumer prices fell 0.2% from September.
Core inflation, excluding food and energy, eased to 2.1% from 2.4%.
Economists warn that relief may be short-lived. Vistesen wrote that energy inflation is likely to stay subdued through the end of the year, but snap back in January and February if fuel duties rise again.
"The current German core inflation numbers look dovish, but this weakness won't last long," he said.
What does this mean for the eurozone as a whole?
Eurostat will publish its flash estimate for the entire currency bloc next week, and Friday's figures point to another uncomfortable reading.
Before the Italian data, BofA Global Research expected eurozone inflation of 3.7% in October.
After the Italian surprise, Pantheon raised its own forecast to 4%, up from 3.8% in September and twice the ECB's 2% target.
Paolo Grignani, senior economist at Oxford Economics, said the day's data paint "a mixed picture for the Eurozone with stagflationary tendencies."
Energy is still doing the heavy lifting, he said, but there are "worrying signs of the energy shock spreading rapidly to stickier components."
With eurozone growth holding at 0.4% in the third quarter, Oxford Economics expects the ECB to raise rates twice more.
Will the ECB raise rates again?
On Thursday, the ECB kept its deposit rate at 2.5%, after a hike in September. Christine Lagarde said policymakers had discussed another increase but agreed unanimously to wait.
The meeting was overshadowed by her announcement that she will step down in February, nine months before her term ends.
Matthew Ryan, head of market strategy at financial services firm Ebury, said in emailed comments that a December hike remains "very much 'live'".
He added that a drawn-out search for Lagarde's successor "could inject volatility into markets at an already fragile moment."
Nellis said the ECB is in a tough position. Years of sluggish growth argue for keeping borrowing costs supportive, but with price pressures mounting, the central bank "may be forced to raise interest rates further at its December meeting."
Friday's numbers show both sides of that dilemma.
In Germany, a targeted tax cut was enough to bring inflation down. In Italy, the energy shock is already showing up in what families pay for food and travel.
Which of those two stories spreads across the rest of the eurozone may decide how far the ECB has to go.
