Italy's inflation rate accelerated to 4.2% in September, its highest level in three years, according to preliminary data from the national statistics institute Istat. The jump, driven by a sharp rise in energy costs and fresh food prices, has reignited concerns about the erosion of purchasing power and dampened confidence among households and businesses.
The consumer price index for the whole community (NIC) rose 0.7% month-on-month, pushing the annual rate up from 3.3% in August. The last time inflation was higher was in September 2023, when it stood at 5.3%. While today's figures remain far from the double-digit inflation of the 1970s and 1980s, the psychological impact is palpable. As one economist put it, inflation acts as "the most unjust tax," silently draining savings and forcing families to make difficult choices.
Energy and food lead the surge
The latest spike is almost entirely attributable to the energy sector. The cost of energy goods jumped from 17.1% to 22.3% year-on-year, with regulated energy prices soaring from 18.6% to 25.9% and unregulated energy from 17.0% to 22.2%. Fresh food prices also accelerated, with unprocessed food items like fruit and vegetables rising from 3.8% to 5.5% annually. Recreational and cultural services saw a 2.9% increase, while transport services rose 1.6% despite a seasonal monthly dip.
Core inflation, which excludes energy and fresh food, rose only modestly from 1.5% to 1.7%, suggesting that the current pressures are concentrated in volatile categories. However, the gap between goods and services inflation widened significantly: goods prices accelerated from 4.1% to 5.4%, while services grew from 2.4% to 2.6%, leaving a difference of 2.8 percentage points.
The harmonised index of consumer prices (HICP), used for EU-wide comparisons, showed a monthly increase of 2.0% (partly due to the end of summer sales) and an annual rate of 4.1%.
Fuel prices and consumer confidence
At the pump, the Ministry for Business and Made in Italy (Mimit) reported a slight easing in fuel prices, with self-service petrol averaging €2.111 per litre and diesel €2.316 on the road network. However, a "significant gap" remains between retailers: major operators like Eni, IP, and Q8 have introduced price caps, offering petrol at €1.99 and diesel at €2.19 per litre. This follows a broader trend across Europe, as seen in Portugal's fuel surge, where prices have also topped €2.
The economic strain is taking a toll on sentiment. Istat's consumer confidence index fell from 94.5 to 91.2 points, while the composite business confidence indicator dropped from 97.0 to 95.9. This decline reflects a growing caution among Italians, who are postponing non-essential spending and freezing investments. The fear of high bills and rising living costs is casting a shadow over the autumn, underscoring how much the economy depends on public trust in the future.
Italy's situation is not isolated. Spanish inflation hit 4.9% in September, also driven by fuel costs, and the EU heads into winter with thin gas reserves, which could keep energy prices elevated across the continent. For Italy, the government has previously extended fuel tax cuts to mitigate pump prices, but the current spike suggests more measures may be needed.
As Italians brace for an uncertain winter, the data serves as a reminder that inflation is not just a statistic but a daily reality that shapes economic behaviour and political priorities.
