FX.co ★ Italian Inflation Unexpectedly Sinks to 1-Year Low

In October 2025, Italy's annual inflation rate decreased to 1.2%, down from 1.6% in September. This marks the lowest rate in a year and defies market expectations, which had anticipated it would remain steady at 1.6%, according to a preliminary estimate. The drop was influenced by a significant decline in regulated energy prices, which plummeted to -0.8% from September's 13.9%, due to reduced global benchmark prices and baseline effects. Additionally, inflation decelerated for fresh food, declining to 1.9% from 4.8%, and for transportation services, which eased to 2.0% from 2.4%. Conversely, there was a slight increase in price growth for recreational and cultural services, which rose to 3.3% from 3.1%. The core inflation rate, excluding energy and fresh food components, remained steady at 2%, indicative of price stability within the fundamental sectors of the consumer basket. On a month-to-month basis, consumer prices saw a decrease of 0.3%, following a 0.2% reduction in September.