Italy's July Inflation Tops Forecasts Amid Energy Price Surge

Italy's harmonized consumer price index (HICP) rose 2.9% year-on-year in July, exceeding forecasts of 2.8%, according to final data released by the national statistics institute Istat.

The main drivers behind the increase were higher prices for energy goods, particularly electricity and gas, which rose at a faster pace than in June. Unprocessed food prices also picked up, reflecting supply-side pressures.

Core inflation, which excludes energy and fresh food, remained stable at 2.1% year-on-year, indicating that underlying price pressures are contained but not yet fully subdued.

The slight upside surprise in Italy's inflation aligns with the broader eurozone trend, where inflation has proven more persistent than anticipated. This supports a cautious approach to interest rate cuts by the European Central Bank (ECB).