Italy's Inflation Rate Rose More Than Expected in January
(Bloomberg) -- Italian inflation increased above estimates in January, while monthly prices fell on post-holiday store sales
Consumer prices based on European Union criteria rose last month 1.1 percent from a year earlier, national statistics agency Istat said in a preliminary report on Friday in Rome. The median estimate in a Bloomberg survey of 16 analysts called for a 0.8 percent rise.
Italian consumer prices fell 1.6 percent on a monthly basis, as a result of winter sales. Core inflation, which strips out energy and some other price-volatile items, picked up to 0.8 percent in January from 0.5 percent the month before.
What Our Economists Say:“The unexpected acceleration of headline and core inflation in Italy masks an unchanged figure for the service sector, which is the best of the three for a read on underlying price increases. In any case, all of those measures have been muddied by recent legislative changes to university fees. Wage growth is showing signs of life and Bloomberg Economics forecasts further improvement this year.”
--David Powell, Bloomberg Economics
For more, see our Italy React
The Italian inflation rate is getting closer to the 1.3 percent recorded for the euro zone as a whole last month. That in turn is below the area’s central bank target of just under 2 percent.
“The weakness of underlying price increases is unlikely to stop the European Central Bank from altering its forward guidance by dropping a commitment to keep expanding its asset purchases until inflation accelerates on a sustainable basis,” Bloomberg economists including Powell said in a note this week.
The Italian figures for January were based on a revised basket of goods and services Istat uses to measure the monthly changes in Italy’s consumer prices.
Transportation and restaurants were given greater weights, while some specialty wines and electric dryers were among those sectors added. Education, tobacco products and communication were among those given lesser weight, according to Istat.
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