FX.co ★ Italian Inflation Rate Inches Higher

The annual inflation rate in Italy climbed to 1.2% in December 2025, up from November's 13-month low of 1.1%, as revealed by preliminary estimates. This figure slightly surpassed market expectations, which had anticipated the rate would remain unchanged at 1.1%. The rise in inflation was primarily driven by increased costs in transportation services, which surged to 2.6% from 0.9% in November, along with fresh food costs escalating to 2.3% from 1.1%, and processed food prices increasing to 2.6% from 2.1%. These increases were partially counterbalanced by intensified deflation in regulated energy prices, which dropped to -5.3% from -3.2%, and a deceleration in price growth for recreational, cultural, and personal services, which slightly decreased to 2.7% from 3%. The core inflation rate, excluding the typically volatile segments of energy and fresh food, edged up to 1.8% from 1.7%. Concurrently, the EU-harmonized inflation rate rose to 1.2% during this time, remaining well above the European Central Bank's target rate of 2%.