Italy's EU-harmonised CPI jumps to 3.3% in May, slightly above forecast
Italy's EU-harmonised consumer price index climbed to 3.3% year-on-year in May, slightly above market expectations. Energy and services led the rise. The data reopens debate on euro-area inflation dynamics ahead of the European Central Bank's June meeting.
Italy's EU-harmonised consumer price index (HICP) climbed to 3.3% year-on-year in May. The rate, up from 3.1% in April, came in just above the 3.2% median expectation of economists polled by Reuters. The upside surprise was driven by Middle East-linked energy pressure and persistent services inflation.
Francesco Maria Chelli, president of Italy's national statistics institute (Istat), said services-sector inflation rose to 4.1% year-on-year and food inflation came in at 2.9% year-on-year. Tito Boeri of Bocconi University in Milan said the print 'adds an additional layer of sensitivity' to the European Central Bank's June rate decision.
The ECB Governing Council will meet on 5 June. Capital Economics' Andrew Kenningham raised the probability that President Christine Lagarde could pause rate cuts to 35%. Italy's ten-year government bond yield rose 7 basis points after the print. This article is sector analysis and not investment advice; readers should consult qualified professional opinion before acting on this information.
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