The second estimate for Italian consumer price inflation rose 0.3 percent on the month in August, taking annual growth to 5.4 percent and down from 5.9 percent in July.

The RPI registered at zero, while the RPI-P hit minus 6.

Core inflation excluding energy and unprocessed food rose by 4.8 percent, unchanged from the initial estimate, down from 5.2 percent in July.

Goods prices inflation rose by an annual rate of 6.5 percent, in line with data released earlier, down from a 7.0 percent rise in July. Service price inflation also ebbed, declining to an unrevised 3.6 percent from 4.1 percent in July.

The harmonised consumer price index tracked by the European Central Bank rose by 0.2 percent in August, matching the initial estimate, taking the annual rate of HICP to an unrevised 5.5 percent, down from the 6.3 percent increase in July.

While there was little change in the Italian data, an upward revision in French HICP could feed into later iterations of eurozone HICP. Harmonised inflation for the bloc stabilised at an annual rate of 5.3 percent last month, according to preliminary data, after falling by 0.1 percent between July and August. Eurostat will release updated August inflation numbers on Tuesday.

ECB President Christine Lagarde hinted that interest rates could remain at current levels after announcing a 25-basis point increase in the Bank's main benchmarks on Thursday. However, she did briefly touch upon the recent rise in commodities prices at the end of her press briefing, suggesting the governing council is bracing for challenges in the battle to bring inflation to target. That raises questions over whether the ECB is prepared to look through any future rise in headline inflation when considering its next moves.

No revision is expected to the provisional data leaving prices rising 0.4 percent on the month and a yearly inflation rate of 5.5 percent, down from July's final 5.9 percent.

The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI provide widely used measures of inflation. A provisional estimate, with limited detail, is released about two weeks before the final data are reported.

The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries such as the Italy where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. As a member of the European Monetary Union, Italy's interest rates are set by the European Central Bank.

Italy like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies. The core CPI, which excludes fresh food, is usually the preferred indicator of short-term inflation pressures.

Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.

By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.