| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.4% | 0.2% to 0.4% | 0.0% | 0.4% |
| Year over Year | 3.3% | 3.2% to 3.4% | 3.0% | 3.2% |
| HICP - M/M | 0.1% | 0.3% | ||
| HICP - Y/Y | 3.1% | 3.2% |
Highlights
Consumer prices were unexpectedly unchanged in June compared to May when they rose 0.4 percent, while increasing 3.0 percent year-on-year, preliminary figures showed. Both results are below the median of an Econoday survey of economists' forecasts calling for a 0.4 percent month-on-month increase and a 3.3 percent year-on-year increase.
Energy prices were 0.2 percent lower on the month, although 12.7 percent higher than a year ago. Excluding energy, the CPI was 0.1 percent higher month-on-month and 2.0 percent year-on-year.
Food and alcoholic beverages helped to keep overall prices in check, falling 0.4 percent in June from a month ago and rising 2.1 percent year-on-year.
The Harmonized Index of Consumer Prices (HICP) increased 0.1 percent month-on-month and 3.1 percent year on year.
Like other European countries so far, June inflation has moderated from May levels which will come as broad relief to consumers and also to the European Central Bank.
Market Consensus Before Announcement
CPI seen at 0.4 percent and 3.3 percent in June versus 0.4 percent and 3.2 percent in May.
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.