- Prior +3.3%
- HICP +4.1% vs +3.8% y/y expected
- Prior +3.2%
Italy’s preliminary September inflation data came in well above expectations, with headline CPI rising 4.2% y/y, up sharply from 3.3% in August and above the 3.8% consensus. The HICP measure also accelerated to 4.1% y/y, compared with 3.2% previously and 3.8% expected. The data adds to the broader pickup in headline inflation across the euro area, with higher energy prices remaining the main driver.
For the ECB, however, the key question is whether the energy shock remains contained or begins to generate second-round effects across the economy. Policymakers are therefore paying particular attention to core inflation, wages and services prices. So far, policymakers haven’t been seeing clear signs of second-round effects.
