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EUROPEAN INFLATION: Italian December HICP Confirms Flash Estimates

EUROPEAN INFLATION

Italian December HICP inflation confirmed flash estimates at 1.4% Y/Y. Core HICP fell two tenths to 1.8% Y/Y (vs 2.0% prior), also confirming the flash reading. 

  • Unsurprisingly, revisions were limited across the major sub-components. Services inflation was 2.9% Y/Y (vs 3.2% prior), below 3% for the first time since April 2022.
  • Services related to recreation including repairs and personal care drove the disinflation, with recreation and culture easing to 1.1% Y/Y (vs 2.4% prior) and restaurants and hotels to 2.9% Y/Y (vs 3.4% prior).
  • Non-energy industrial goods eased to 0.1% Y/Y (vs 0.4% prior), with durable, non-durable and semi-durable goods seeing disinflation.
  • Energy inflation was -2.7% Y/Y (vs -5.4% prior), while food alcohol and tobacco was 2.1% Y/Y (vs 2.8% prior).
  • The proportion of ECOICOP sub-components with inflation rates below 6% Y/Y fell to a fresh cycle low of 7% in December (vs 11% prior).
  • 6-month ahead inflation expectations in the Bank of Italy’s Q4 survey (released on Tuesday) were 1.4% Y/Y (vs 1.7% in Q3). One and two year-ahead expectations were 1.5% Y/Y (vs 1.7% prior). Bank of Italy notes that “expectations continue to be similar across firms belonging to different sectors, size classes and regions”.

 

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Italian December HICP inflation confirmed flash estimates at 1.4% Y/Y. Core HICP fell two tenths to 1.8% Y/Y (vs 2.0% prior), also confirming the flash reading. 

  • Unsurprisingly, revisions were limited across the major sub-components. Services inflation was 2.9% Y/Y (vs 3.2% prior), below 3% for the first time since April 2022.
  • Services related to recreation including repairs and personal care drove the disinflation, with recreation and culture easing to 1.1% Y/Y (vs 2.4% prior) and restaurants and hotels to 2.9% Y/Y (vs 3.4% prior).
  • Non-energy industrial goods eased to 0.1% Y/Y (vs 0.4% prior), with durable, non-durable and semi-durable goods seeing disinflation.
  • Energy inflation was -2.7% Y/Y (vs -5.4% prior), while food alcohol and tobacco was 2.1% Y/Y (vs 2.8% prior).
  • The proportion of ECOICOP sub-components with inflation rates below 6% Y/Y fell to a fresh cycle low of 7% in December (vs 11% prior).
  • 6-month ahead inflation expectations in the Bank of Italy’s Q4 survey (released on Tuesday) were 1.4% Y/Y (vs 1.7% in Q3). One and two year-ahead expectations were 1.5% Y/Y (vs 1.7% prior). Bank of Italy notes that “expectations continue to be similar across firms belonging to different sectors, size classes and regions”.

 

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