Italy has made a stunning exit from a year of deflation to record its highest level of price rises in three years.

Annual EU-harmonised Italian inflation hit 2 per cent in April – the first time it has breached the eurozone’s target since 2013 and marking a sharp rebound in consumer prices which ended the year in negative territory in 2016.

Italy’s inflation rate now matches that seen in Germany in April and is above the 1.9 per cent average across the eurozone. The country’s core inflation rate, which strips out volatile elements, also leapt to 1.2 per cent from 0.7 per cent in March.

The monthly inflation basket was pushed up by a 5.7 per cent jump in energy prices, a 3.3 per cent rise in transport costs and a 1.8 per cent rise in goods.

With the exception of France, inflation has been fired up again across the eurozone in April due to the later timing of Easter which has helped drive transport and leisure costs higher.

Italy has long suffered under weak price growth, which has kept a lid on its nominal GDP growth and weighed on the country’s 130 per cent debt to GDP burden.

First chart via Bloomberg