Germany, France, Italy and Spain: Where was inflation highest in October?

In October, Italy experienced the highest inflation rates among the four largest European economies, with prices rising by 5.4% compared to a year earlier. Spain followed with 4.9% inflation, while France saw 3.4% and Germany 2.8%.

However, the direction of inflation varied among the countries. Italy and France saw accelerating inflation, while Spain had a steady rate and Germany saw a decline. All four economies were grappling with the same surge in energy costs, leading to different inflation outcomes.

In Italy, energy prices surged by 31.4%, driven by international geopolitical factors. This led to a 5.6% increase in inflation, as measured by the harmonised EU index. Food prices also rose, with the shopping trolley basket increasing by 2.5%.

Spain's inflation remained flat at 4.9% due to cheaper fuel compared to October 2022, though energy prices still rose by 24.1%. The underlying inflation, excluding energy and unprocessed food, stayed at 3.1%.

In France, inflation hit 3.4%, the highest since January 2024, with energy prices surging 24.1% year-on-year. This pushed the economy towards stagflation, where rising prices coexist with stagnant growth. French inflation is predicted to exceed 4% by November.

Germany, however, saw a drop in inflation to 2.8%, mainly due to a cut in fuel taxes that went into effect in October. Energy prices slowed to 12.2%, and consumer prices fell by 0.2%. While the current German data may be short-lived, economists expect energy inflation to return in early 2025 if fuel duties are raised again.