Final Italian HICP consumer prices likley to print at 0.5% yoy

As expected, Italy's energy component was the biggest drag, declining further from -5.4% yoy in July to -6.4% yoy in August and cutting 10bp from the headline figure. The food component increased from 1.1% yoy in July to 1.3% yoy, contributing 4bp to the headline figure. 

"The final Italian HICP inflation is expected to confirm the flash estimate of 0.5% yoy in August. Inflation for the month was higher than was expected both by us and the market largely due to higher prices for food, alcohol & tobacco, and non-energy industrial goods", says Societe Generale. 

The core component, i.e. all items excluding energy, food, alcohol and tobacco ticked up from 1.0% yoy in July to 1.1% yoy in August. This was led by non-energy industrial goods rising from 0.8% yoy to 1.1% yoy in the month (adding 8bp), while services remained stable at 0.7% yoy .

"Looking ahead, Italian HICP inflation is expected to average 0.4% in 2015 and 1.3% yoy in 2016. The core component should average 0.8% in 2015 and 1.2% in 2016", added Societe Generale.