| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.2% | 0.2% to 0.2% | 0.2% | 0.2% |
| Year over Year | 1.2% | 1.2% to 1.2% | 1.2% | 1.2% |
| HICP - M/M | 0.2% | 0.2% | ||
| HICP - Y/Y | 1.2% | 1.2% |
Highlights
Italy's inflation dynamics at the end of 2025 suggest a mild but broad-based firming of prices rather than overheating. Headline inflation, measured by the national consumer price index (NIC), rose to 1.2 percent year-over-year in December, up slightly from November, while monthly inflation stood at a modest 0.2 percent. This indicates gradual price momentum, consistent with a controlled inflation environment.
Underlying pressures remain contained. Core inflation was stable at 1.7 percent, and inflation excluding energy edged up to 1.8 percent, signalling that price growth outside volatile components is steady rather than accelerating. Food prices present a mixed picture as grocery and unprocessed food prices were flat month-over-month but rose by 1.9 percent annually, pointing to lingering supply-side pressures without short-term escalation.
Monthly inflation was mainly driven by services linked to transport, which rose sharply by 3.1 percent, reflecting seasonal demand and mobility-related costs. This was partly offset by declining prices for regulated energy and recreation-related services, which helped prevent stronger overall inflation.
The harmonised index of consumer prices (HICP) mirrors this trend, with annual inflation at 1.2 percent in December and an average of 1.7 percent in 2025, up from 2024. In summary, the December updates for Italy point to stable inflation, shaped more by service-sector dynamics than by energy or food shocks, taking the RPI to minus 5 and the RPI-P to 22. This means that economic activities are now within the expectations of the Italian economy.
Market Consensus Before Announcement
Forecasters see no revision in the final report for December from the flash at 0.2 percent and 1.2 percent on year.
Definition
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.
Description
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.