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HICP Slows Less than Expected, Core Sees Minor Deceleration

MNI (London)

ITALY MAY HICP +0.3% M/M (FCST -0.2%); APR +1.0% M/M

ITALY MAY HICP +8.1% Y/Y (FCST +7.5%); APR +8.7% Y/Y

  • In May, Italian HICP rose +0.3% m/m (easing from +1.0% in April), and decelerated by 0.6pp to +8.1% y/y (easing from +8.7% April). Despite the stronger-than-anticipated Italian HICP print, the bulk of the inflationary pressures continued to follow a downwards trajectory.
  • In the annualised HICP data, cooling energy prices accounted for the bulk of the May deceleration (+11.9% y/y vs +16.7% in April), followed by softer slowdowns in industrial goods (+5.3% vs +5.5%) and food/alc/tobacco (10.9% vs 11%). Harmonised services inflation held steady at +5.1% y/y. Sticky services inflation has been largely foreshadowed by higher prices charged in recent PMI data.
  • In aggregate, core HICP (ex. energy, food, alcohol and tobacco) edged down 0.1pp to +5.2% y/y. This was likely a softer core decline compared to evidence for French, German and Spanish core moves.

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