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France’s CPI as well as HICP inflation are likely to have accelerated slightly in June. The flash HICP inflation is anticipated to have accelerated to 0.3 percent year-on-year, whereas the CPI inflation is likely to have accelerated to 0.2 percent year-on-year, said Societe Generale in a research report. Most of the major components, excluding food, are expected to have recovered on a year-on-year basis.
Given the rise in oil price, the energy component is expected to have grown on a sequential basis and register a lower drop on a year-on-year basis. Food prices are likely to have remained stable in June following a recovery in the prior month. Meanwhile, core inflation is likely to have recovered slightly in June to 0.7 percent year-on-year.
French inflation is expected to continue rebounding at a more rapid rate beginning in the second half of this year, helped by base effects from energy prices, according to Societe Generale.
Meanwhile, the nation’s consumer spending is likely to have weakened further in May following a slight decline in April. Consumers are expected to have become more cautious due to the strike action. Consumption of fuel is likely to have been impacted noticeably due to the shutting of refineries. Moreover, energy consumption would have dropped for the first time since November.
“With a constant profile next month, however, overall consumer spending should still be on course for an increase of 0.4 percent qoq in Q2 after weaker numbers at the turn of the year,” added Societe Generale.
Meanwhile, Italy’s inflation is likely to have rebounded in June. Flash Italian HICP inflation is expected to have accelerated to 0 percent year-on-year, led by recoveries in all major components. The energy component is likely to have remained negative, but is expected to improve posting a lesser annual decline, noted Societe Generale.
Italian food prices are expected to have improved for the third consecutive month in June. Core inflation is also anticipated to have recovered slightly due to a modest increase in the prices of both services and the non-energy industrial goods.
“Looking ahead, similar to other euro area countries, Italian inflation will continue to improve, rising visibly above 1.0 percent yoy by Q4 16 on account of base effects from energy prices”, stated Societe Generale.
