Italian consumer price inflation and core inflation accelerate in August

Italian flash headline inflation accelerated in August. The official statistical institute showed that the preliminary estimates indicate that the consumer price index rose 0.5 percent sequentially in August. On a year-on-year basis, the headline inflation accelerated to 1.7 percent from July’s 1.5 percent. The August figures came in above consensus expectations.

On a year-on-year basis, the headline rate was mainly driven by services prices related to transport and slightly due to processed food. The prices of Energy products decelerated their growth to 7.6 percent from 7.9 percent, as well as those of unprocessed food to 3 percent from 3.6 percent.

Core inflation, excluding energy and unprocessed food, rose 0.9 percent, while inflation excluding energy came in at 1.1 percent. Sequentially, the headline inflation was mainly driven by the rises of prices of Services related to transport (4.6 percent) mainly due to seasonal factors.

The annual rate of change of goods prices eased to 2 percent from 2.1 percent and that one of prices of services came in at 1.1 percent. Thus the inflationary gap between services and goods remains negative.

According to preliminary estimates, the Italian harmonized index of consumer prices eased by 0.1 percent compared with the previous month, while it rose 1.7 percent year-on-year. The sequential fall was mainly because of the summer sales of clothing and footwear, which are not taken into account in the national index NIC.

On a year-on-year basis, the slowdown of HICP is due to the trend reversal of clothing and footwear prices, caused by a greater effect of the summer sales seasonal balances registered for the whole August, compared to the previous month when they began not before 7th July.

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