Italy: Inflation picks up in December
January 14, 2011
In December, consumer prices (including tobacco) rose 0.4% over the previous month, stepping up from the flat reading recorded in November and confirming the result of the preliminary estimate, released on 4 January. As a result, annual inflation rose to 1.9% from 1.7% in November, matching market expectations. Higher prices for transport, which increased 1.4% over the previous month, drove the monthly price increase. The rise in the price for transport reflected an increase in oil prices, as the sub-category relative to prices for fuel and lubricants increased 3.0% over the previous month. The core inflation index, which excludes more volatile categories such as non-processed food and energy, rose 0.2% over the previous month, contrasting November's 0.1% month-on-month drop but below the 0.3% increase recorded in December 2009. Consequently, annual core inflation inched down from November's 1.5% to 1.4%. Finally, annual average HICP inflation remained unchanged at November's 1.6%. The Bank of Italy expects HICP inflation to average 1.5% this year, and 1.9% next year.
Author: Armando Ciccarelli, Head of Data Solutions