France and Italy inflation jumps on energy costs

Inflation rates rose in France and Italy in September as energy and fuel costs increased, official data showed Wednesday.

France's annual inflation rate reached 3 percent, its highest level since February 2024, up from 2.4 percent in August, statistics office Insee said.

In Italy, inflation rose to 4.2 percent from 3.3 percent in August, the Istat agency reported.

The figures are above the European Central Bank's 2 percent inflation target. The central bank raised its benchmark rate to 2.5 percent earlier this month.

Diesel prices have reached record highs in France, Italy, Germany and several other eurozone countries in recent weeks as the Middle East war slowed shipments of crude oil and refined fuels from the Gulf.

Analysts at ING said the French figures suggest inflation is likely to remain above 3 percent for the rest of 2026 before gradually declining in 2027. They said that would weigh on household purchasing power as consumption weakens and rising interest rates add to France's fiscal difficulties.

Insee also reported Wednesday that consumer spending fell 0.5 percent in France in August and that public debt stood at 119 percent of GDP in the second quarter.

Germany is due to release inflation data later Wednesday, ahead of the full eurozone reading on Friday.