EUROPEAN INFLATION: Italy March HICP Confirms Flash; Goods Boosted By Sales End

Italian March final HICP – and all its major sub-components – confirmed flash estimates. Headline rose to 2.1% Y/Y (vs 1.7% prior), largely owing to an acceleration in energy inflation (3.3% vs 0.6% prior).

• Core HICP (excluding energy and unprocessed foods) also ticked up to 1.9% (vs 1.8% prior), with core goods at 0.5% (vs -0.1% prior) and services at 2.7% (vs 2.6% prior).
• Within services, package holiday inflation eased to 9.81% Y/Y (vs 12.10% prior), while airfares fell -6.6% Y/Y (vs -1.0% prior, despite an 11.0% M/M rate).
• However, restaurant and hotel inflation picked up to 3.24% Y/Y (vs 2.77% prior). Housing and communication services also accelerated on an annual basis.
• Core goods inflation unsurprisingly accelerated following the end of winter sales for clothing and footwear (1.33% Y/Y vs -0.64% prior).
• The proportion of HICP sub-components with annual inflation rates between 1-3% actually fell to 33% in March (vs 42% prior), with a 6pp uptick in components with rates between 3-5% to 16%.