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Still No Pick Up In Eurozone Inflation

James Boston
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Still No Pick Up In Eurozone Inflation

Eurozone inflation is showing signs of stabilizing according to the preliminary June data just released by Eurostat. The Consumer Price Index (CPI) is showing a year on year gain of 0.5%, this appears to match last months 0.5% price expansion but falls short of the market expectations for a 0.6% inflation reading this month. The CPI Core number is however showing signs of expanding, this is now showing at 0.8% compared to last month’s final reading of 0.7%.

The Italian authorities have also taken the opportunity this morning to release their inflation numbers for the month, these too are in preliminary form. The headline year on year CPI for the country is now showing at 0.3%, this represents a drop on the May final figure of 0.5% but matches the consensus estimate for 0.3% price expansion. Month on month the CPI is expanding by 0.1%, this is a turnaround on May’s contraction of -0.1% and is right in line with expectations of 0.1%.

Italy’s EU-Norm CPI data is also coming in quiet mixed this morning, the year on year number is now just 0.2%, down from last month’s 0.4% and disappointing in terms of the consensus estimate for no change to the reading. Month on month the figure is a little more promising at 0.1%, this reverses the May fall of -0.1% but comes in short of the market consensus estimate of 0.2%.

Markets are not showing signs of being overly impressed by this morning’s inflation data. Although it has to be noted that this data is just preliminary at this stage and subject to revision later next month there is still no clear evidence of any upward trend in the rate of price growth across the Eurozone. The ECB would no doubt have been hopeful for some positive trend emerging in today’s data, in the absence of this the quantitative easing discussion must come back on the table.

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