FX.co ★ Italian Inflation Unexpectedly Remains Unchanged

In July 2025, Italy's annual inflation rate held steady at 1.7%, defying market predictions of a decline to 1.5%, based on a preliminary assessment. Simultaneously, the EU-harmonized inflation rate slightly decreased to 1.7% from 1.8% the month before. This rate marked the lowest level of the year and stayed below the European Central Bank's 2% target, though it surpassed forecasts of a 1.6% rate. Notably, inflation increased for both unprocessed foods, rising to 5.1% from 4.2% in June, and processed foods, which climbed to 3.1% from 2.7%. There was also an inflation uptick in miscellaneous services (2.2% from 1.6%) and transportation services (3.4% from 2.9%). Conversely, price increases slowed for regulated energy (16.7% down from 22.6%) and for recreational and cultural services (2.6% down from 3.2%). Core inflation, which excludes the often unpredictable fresh food and energy components, remained steady at 2%. The Italian Consumer Price Index (CPI) saw a month-on-month rise of 0.4%.