Inflation eases in Spain and Italy

28th Jun 2024 10:19

(Sharecast News) - The rate of inflation eased in two of the eurozone biggest economies in June, preliminary country data showed on Friday.

Spain's National Statistics Institute said annual consumer price inflation was 3.4% in June, down from May's one-year high of 3.6%. It was, however, a little higher than expectations, with most analysts looking for 3.3%.

The fall was driven primarily by slowing food and fuel prices, offsetting an increase in the cost of leisure and cultural services as Spain entered its key summer tourist season.

The core rate, which strips out volatile elements such as energy and food, was unchanged at 3%, while the harmonised index of consumer prices (HICP) fell to 3.5% from 3.8%.

All European Union countries use the same methodology to calculate HICP.

In France, meanwhile, inflation was estimated by the National Institute of Statistics and Economic Studies to be 2.1% in June, compared to May's 2.3%. HICP eased to 2.5% from 2.6%.

As with Spain, the decline was led by falling food and energy prices, and was largely in line with forecasts.

In Italy, however, the consumer price index was unchanged at 0.8%, disappointing analyst expectations for a slight rise to 1%. HICP edged up to 0.9% from 0.8% in May, Italy's National Institute of Statistics estimated.

Leo Barincou, senior economist at Oxford Economics, said: "Although recent economic data and surveys indicated a hesitate economic recovery [in Europe], the trend has been more positive on the prices front.

"Today's inflation prints should help bolster the hand of the European Central Bank's doves and will bring some reassurance after data earlier this showed a marked acceleration in labour costs in the first quarter."