• July final CPI +2.9% vs +2.8% y/y prelim
• Prior +3.0%
• July final HICP +2.9% vs +2.9% y/y prelim
• Prior +3.0%

Italy headline annual inflation is confirmed to see just a marginal drop from June to July. This comes amid a slowdown in a couple of categories, namely unregulated energy products (from +13.3% to +11.4%), unprocessed food products (from +4.4% to +3.6%), and miscellaneous services (from +2.5% to +1.8%).

To offset that, there was an acceleration in the price dynamics for regulated energy products (from +9.2% to +14.8%) and transport-related services (from +1.1% to +1.6%).

But all in all, core annual inflation is seen keeping steadier at 1.6% in July. Goods prices are seen slowing slightly to 3.2% (previously 3.3%) while services prices accelerated just a touch to 2.7% (previously 2.6%).

The balance continues to be a tough one for the ECB, with core price pressures in the likes of France and Italy keeping in a “sweet spot” but still running hot in the likes of Germany and Spain.

As the Middle East conflict rages on, it does present a bit of a conundrum for policymakers in perhaps needing to act again in September.

This article was written by Justin Low at investinglive.com.