Italian inflation jumped to 5.4% in October, up from 4.2% in September, making Italy the hottest of the eurozone's four largest economies and complicating the European Central Bank's next move. The figure matched the level last seen in August 2023 and came in well above the 4.6% economists had expected.

Energy did most of the damage. Italian energy prices were 31.4% higher than a year earlier, up from a 22.6% annual rise in September, with regulated energy tariffs up 59.5%. On the harmonised measure used to compare countries across the EU, Italian inflation reached 5.6%.

The contrast across the bloc is now wide. Spain's inflation held at 4.9% in October, France's rose to 3.4%, and Germany's eased to 2.8%, leaving a gap of 2.8 percentage points between Germany and Italy on the harmonised measure. The euro area as a whole recorded 4.0% inflation in October, according to Eurostat's flash estimate, up from 3.8% in September, with energy up 20.8% across the bloc.

Italy also reported no economic growth in the third quarter, leaving the country with the eurozone's highest inflation and a stalled economy at the same time. That combination is the hardest one for a central bank to manage, because the single ECB policy rate must fit economies pulling in different directions.

The ECB held its deposit rate at 2.50% on 29 October and meets again on 17 December. After the October inflation data, money markets priced roughly a 72% chance of a December rate rise. Full October figures from Eurostat are due on 18 November, ahead of that decision.