Italian HICP to average at 0.4% in 2015

Flash Italian HICP inflation was recorded above consensus at 0.4% yoy in July from its June reading of 0.2% yoy. The national CPI also inched up to 0.2% yoy in July. On the component details, the energy component recovered from -5.8% yoy to -5.4% yoy, adding 4bp to the headline figures. 

Food prices were the main drag, falling from 1.5% yoy to 1.1% yoy, cutting 8bp. The core components were the main driver behind the increase in inflation (0.7% yoy to 1.0% yoy) led by services increasing from 0.5% yoy to 0.7% yoy, adding 9bp. 

The non-energy industrial goods remained stable at 0.9% yoy.

"Looking ahead, Italian HICP inflation is expected to average 0.4% in 2015 and 1.4% yoy in 2016. The core component should average 0.8% in 2015 and 1.0% in 2016", says Societe Generale.