Air France-KLM and Lufthansa submitted their final bids on Wednesday for a stake in Portuguese airline TAP Air Portugal, bringing the bidding stage of the privatisation process to an end and leaving the next decision with the Portuguese government.

The two airline groups are competing to acquire an initial 44.9% stake in TAP. Their final proposals are expected to include improvements to the binding offers submitted in July, according to Parpública, Portugal’s state shareholding manager.

Parpública said it will now prepare a report assessing the changes proposed by the two bidders. The report will examine the overall merits of the final offers before being sent to the government ministers responsible for finance and air transport.

Wednesday was the deadline established by the Portuguese government for the submission of the final proposals. Infrastructure and Housing Minister Miguel Pinto Luz said earlier this week that the government would have 15 days to take a position after receiving the bids.

The proposals will be assessed on financial and strategic commitments, including investment plans, fleet development, maintenance operations, sustainable aviation fuels and compliance with labour obligations.

Air France-KLM said it had submitted a final proposal for a shareholding of up to 49.9% in TAP, signalling its continued interest in expanding its position in the Portuguese airline.

Air France-KLM Chief Executive Benjamin Smith said the group had strengthened its proposal during the final bidding period and described it as a long-term strategic plan for TAP.

The group said its proposal would place Lisbon at the centre of its operations in Southern Europe and focus on expanding connectivity, creating jobs and generating economic value in Portugal.

Lufthansa also said its final proposal was based on its experience developing network airlines and its plans to support TAP’s growth and competitiveness.

The German airline group said it aimed to help strengthen TAP’s position as Portugal’s national carrier while supporting its future development.

The privatisation process has included the possibility of negotiations to allow bidders to improve their proposals before a preferred investor is selected. The eventual transaction will still require several formal approvals.

The sale is expected to require approval by Portugal’s Council of Ministers, as well as clearance from European competition authorities before it can be completed.

The government is seeking to sell 44.9% of TAP initially, while a further 5% of the airline’s shares is reserved for employees. Any portion of that employee allocation that is not subscribed could subsequently be acquired by the investor selected by the government.

The final bids mark the latest stage in Portugal’s effort to bring a strategic airline investor into TAP following the company’s restructuring and return to financial stability. The government will now review the competing proposals before deciding on the next stage of the process.

Italy’s annual inflation rate accelerated sharply in September, reaching its highest level in three years as energy and fresh food prices increased and consumer and business confidence weakened.

Preliminary figures from Italy’s national statistics agency Istat showed that consumer prices rose 0.7% in September from the previous month. The annual inflation rate climbed to 4.2%, up from 3.3% in August. It was the highest rate since September 2023, when inflation stood at 5.3%.

The latest increase was driven primarily by energy prices. The annual rate for energy goods accelerated to 22.3% from 17.1% in August. Regulated energy prices rose 25.9%, compared with 18.6% a month earlier, while non-regulated energy prices increased 22.2%, up from 17%.

On a monthly basis, regulated energy prices rose 5.9% and non-regulated energy prices increased 4.4%, according to Istat.

Food prices also added to pressure on households. Prices for unprocessed food, including fresh fruit and vegetables, increased 5.5% year on year, compared with 3.8% in August. They rose 2.2% from the previous month.

Prices for recreational, cultural and personal care services also accelerated, while transport services recorded a 2.5% monthly decline but still showed stronger annual growth than in August.

Underlying inflation remained considerably lower than the headline figure. Core inflation, which excludes energy and fresh food, increased from 1.5% to 1.7%. Inflation excluding energy rose from 1.7% to 2.0%. Goods prices increased 5.4% annually, compared with 4.1% in August, while services prices rose 2.6%, up from 2.4%.

The harmonised consumer price index, used for comparisons across the European Union, rose 2% month on month and 4.1% annually. The monthly increase was partly linked to the end of summer sales, which are treated differently under the harmonised measure.

Fuel prices also remained high. Data monitored by Italy’s Ministry for Business and Made in Italy showed average self-service prices of about €2.11 a litre for petrol and €2.32 for diesel on the road network. Prices varied considerably between retailers and locations.

The rise in prices was accompanied by a sharp deterioration in sentiment. Istat said consumer confidence fell from 94.5 points in August to 91.2 in September, while its composite business confidence indicator dropped from 97.0 to 95.9.

The decline suggests that rising household costs and uncertainty are weighing on expectations for the months ahead. Istat noted that part of the movement in consumer confidence reflected changes to its survey organisation, although the underlying indicators also showed weaker assessments of current and future economic conditions.

Oil prices rose on Wednesday as US President Donald Trump rejected reports that Washington was prepared to ease sanctions on Iran, while Qatar continued efforts to bring the two sides closer to negotiations.

Brent crude for November delivery, which expires on Wednesday, rose 71 cents, or 0.69 per cent, to $103.30 a barrel by 7:08 a.m. Saudi time. The more active December contract gained 35 cents to $96.51, while US West Texas Intermediate crude increased 43 cents, or 0.48 per cent, to $89.81.

Brent was on track for a monthly gain of about 14 per cent, which would be its strongest monthly increase since July. WTI was heading for a rise of around 4 per cent after briefly moving above $106 a barrel earlier in the month. Reuters reported that oil prices had fallen 2.5 per cent on Tuesday as traders focused on signs of recovering crude supplies from the Middle East.

The market has remained sensitive to developments surrounding the conflict and diplomatic efforts between Washington and Tehran. Qatar said it was continuing shuttle diplomacy between the United States and Iran in an attempt to establish common ground for negotiations.

Trump has denied reports that he was willing to provide Iran with sanctions relief and release frozen Iranian funds in exchange for steps by Tehran on its nuclear programme. The disagreement has added uncertainty to expectations for a possible diplomatic breakthrough.

At the same time, oil supplies from the Middle East have improved. Saudi Arabia resumed tanker loadings at its Red Sea port of Yanbu after restarting its East-West Pipeline, restoring an important route for crude exports.

Data from Kpler showed crude exports from major Middle Eastern producers reached 16.328 million barrels per day in September, the highest level since the conflict began in late February. However, exports remained about 3.2 million barrels per day below the February level of 19.513 million barrels per day.

The improving supply outlook has limited some of the upward pressure on prices, but traders remain concerned about the security of regional energy infrastructure and shipping routes.

In the United States, preliminary industry data indicated that crude and gasoline inventories increased last week while distillate stocks declined. Official figures from the US Energy Information Administration were due later on Wednesday.

US plans affecting diesel exports are also being monitored by traders. The Trump administration is considering allowing wider sales of red-dyed diesel as it seeks to ease fuel prices, while restrictions on diesel exports could influence refinery demand for crude.

The combination of recovering Middle Eastern supply and continued geopolitical uncertainty is keeping oil markets volatile as traders assess the prospects for diplomacy and the pace of the region’s export recovery.