Europe's Energy Inflation Shock Accelerates Amid Middle East Conflict

Europe is experiencing another energy-driven inflation shock, with crude oil prices playing a significant role. The region's dependence on imported oil and natural gas makes it particularly vulnerable to global energy shocks.

In September, Spain saw its harmonized inflation rate jump to 5.0%, up from 4.6% in August, while Italy's headline inflation accelerated from 3.3% to 4.2%. The main drivers of this increase were rising prices for fuels and lubricants, particularly diesel.

Italy's regulated energy prices surged 25.9% year-on-year, while non-regulated energy prices jumped 22.2%. In contrast, Italian core inflation remained relatively low at 1.7%.