In brief

• Inflation in Italy rose to 5.4% year on year in October, from 4.2% in September.
• The inflation rate is the highest since August 2023, mainly due to more expensive energy and gas.
• GDP in the third quarter did not change quarter on quarter, and hourly wages are growing more slowly than prices.

Inflation returns to a level last seen over two years ago

In October, inflation in Italy accelerated to 5.4% year on year, from 4.2% in September (Il caro energia fa danni vola l' inflazione e la crescita si ferma – zazoom.it). According to Istat statistics, this is the highest reading since August 2023 (Il caro energia fa danni, vola l'inflazione e la crescita si ferma – rainews.it) (Il caro energia fa danni, vola l'inflazione e la crescita si ferma – ANSA). The main driver of the increase was energy prices, which had clearly risen in recent months.

Electricity and gas bills push spending up

Istat notes that on the regulated market, gas costs 56.8% more than a year earlier (Era meglio il contrario. Il Pil è fermo e l'inflazione vola - HuffPost Italia – huffingtonpost.it). Fuel and everyday purchases also became more expensive. Items from the so-called shopping basket, that is food, household products and cosmetics, rose in price by 2.5% in October, compared with 1.5% a month earlier.

The economy is standing still

Italy's GDP in the third quarter of 2026 remained at the level of the previous quarter, after adjustment for calendar effects and seasonality. Year on year, growth amounted to 0.8% (Istat: in Italia si ferma la crescita economica e a ottobre l'inflazione vola a +5,4% | MilanoFinanza News – milanofinanza.it). For comparison, the euro area grew by 0.4% in the same period. Value added increased in services and agriculture and decreased in industry, while net exports recorded a weaker result.

Wages are not keeping up with prices

Hourly wages rose by 2.5%, which is clearly less than inflation. For the second quarter in a row, real wages are falling, meaning households have less and less purchasing power. On the day the data was published, trade unions organized a general strike against rising prices.

What next

The coming months will show whether energy prices stabilize. This will determine whether inflation returns to its earlier level and whether the economy regains its growth momentum.