The monthly consumer price was revised in April. A final 0.1 percent monthly increase was 0.1 percent less than the provisional print. The annual inflation fell a tick from the preliminary April outturn to 1.9 percent, the same as in March.

Both the monthly and the annual final HICP rates were revised in April, showing a 0.4 percent increase on the month and a yearly rate of 2.0 percent, down from March's final yearly rate of 2.1 percent and within the ECB's target.

April uptick in annual CPI rate was partly due to an acceleration in the growth of regulated energy prices (from 27.2 percent to 31.7 percent), unprocessed food (from 3.3 percent to 4.2 percent), processed food (from 1.9 percent to 2.2 percent) and services related to transport (from 1.6 percent to 4.4 percent). However, these contrasted the falls in non-regulated energy products (from 0.7 percent to minus 3.4 percent) and tobacco (from 4.6 percent to 3.4 percent).

Core inflation increased to 2.1 percent, up from 1.7 percent in March.

The final April data again show that inflation in Italy is nothing much for the ECB to worry about. At 1.8 percent, the narrow core HICP rate is well below the 2.0 percent target.

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.