Italy: Inflation rises to two-year high
February 23, 2011
In January, consumer prices (including tobacco) rose 0.4% over the previous month, mirroring the result recorded in December and confirming the preliminary estimate, released on 4 February. Higher food prices were the main driver behind the monthly reading. Building on the monthly increase, annual inflation rose to 2.1% from 1.9% in December, matching market expectations. At the current level, annual headline inflation is at the highest level since December 2008. The core inflation index, which excludes more volatile categories such as non-processed food and energy, rose 0.1% over the previous month, halving December's 0.2% increase. As a consequence of the more moderate monthly increase, annual core inflation remained unchanged at December's 1.4%. Finally, annual average HICP inflation inched up to 1.7% from 1.6% in December. The Bank of Italy expects HICP inflation to average 2.1% this year, and 2.0% next year.
Author: Armando Ciccarelli, Head of Data Solutions