Inflation in Italy at + 3.8% in November: never so high since 2008. The reasons for the boom

Inflation in Italy at + 3.8% in November: never so high since 2008. The reasons for the boom
Inflation in Italy at + 3.8% in November: never so high since 2008. The reasons for the boom

Rome, 30 November 2021 – The race of the‘inflation in Italy and in Europe. TO November, the national index of consumer prices for the whole community (NIC) accelerates again in our country, registering + 3.8% on an annual basis and “reaching a level that has not been recorded since September 2008”. To detect it is theState in its preliminary estimates: last month there was a 3% increase. Core inflation, net of energy and fresh food, rises to levels not seen since March 2013. The boom is mainly due to the now unstoppable growth of prices of energy goods with the acceleration of the unregulated component following that of the regulated component registered in October. And in the Eurozone there is a record: in November the growth on an annual basis is 4.9%, the highest value ever recorded since the Eurostat surveys have existed.

Summary

Based on preliminary estimates, the harmonized index of consumer prices (HICP) shows an increase of 0.8% on a monthly basis and 4.0% on an annual basis (from + 3.2% in October). L’acquired inflation for 2021 (i.e. how much the price index would increase if the year ended now) is equal to + 1.9% for the general index and + 0.8% for the core component. The new acceleration, confirms Istat, is always largely driven by the boom in energy goods (from + 24.9% in October to + 30.7%) and, in particular, in those of the non-regulated component (from + 15.0% to + 24.3%), while the regulated component, while maintaining very sustained growth, recorded a slight slowdown (from + 42.3% to + 41.8%).

Accelerated compared to October, but to a lesser extent, the prices of Food and processed goods (from + 1.0% to + 1.7%) both unprocessed (from + 0.8% to + 1.5%) and those of Transportation related services (from + 2.4% to + 3.6%). Core inflation, net of energy and fresh food, and that net of energy goods alone, both accelerated from + 1.1% in October to + 1.4%. On an annual basis, both the prices of goods (from + 4.2% to + 5.3%) and those of services (from + 1.3% to + 1.7%) accelerate.

But that’s not all, because Istat underlines how inflationary tensions are also spreading in other sectors, albeit to a limited extent. The increase is reflected, in particular, on food and transport services. In detail, the so-called shopping cart with the prices of food goods, for home and personal care which go from + 1.0% to + 1.4%, and the prices of products with high frequency of purchase also increase (from + 3.1% at + 3.8%).

Apart from Italy, inflation also rises in Eurozone. It goes from + 4.1% in October to + 4.9% in November. This is a record leap, never registered since the start of Eurostat’s statistical series, over 20 years ago. On a monthly basis, the overall increase in prices is estimated at 0.5%, while excluding energy, inflation is 2.5% per annum, from 2.0% in October, and 0.1% monthly. There annual growth in energy prices soars to 27.4%, from 23.7%, while the prices of services grow de2.7% from 2.1% in October, industrial goods excluding energy see prices rise by 2.4% from 2.0% in October and food, alcohol and tobacco up by 2.2% from 1.9% in October.

The prices of energy goods are soaring and the government “is ready to intervene again” to stem the expensive bills. To say the premier Mario Draghi, speaking at the event ‘Work and Energy for a sustainable transition’. “To limit the price increases in the short term and to help the poorest families in particular, we allocated 1.2 billion euros in June and over 3 billion in September – he recalls -. We are intervening in the budget law and we are ready to continue to do so. with particular attention to the weaker groups. We asked the European Commission to study medium-term solutions, for example on the subject of storage, to limit price fluctuations and risks for businesses and citizens “.

A race beyond estimates. The inflation boom is being taken seriously by European institutions with the ECB publishing the interview of Vice President Luis de Guindos to the French newspaper Les Echos. “The prospects for the price trend are not entirely clear – he explains -. What is certain is that the factors behind the high inflation rate we are experiencing will not last, and we should see them fade next year. “.

De Guindos admits: “We underestimated inflation developments in 2021. Not just the ECB, but all forecasters. The European Commission released its economic projections two weeks ago and revised inflation data upwards.”

All displaced then, first and foremost the ECB. But what has brought this increase beyond estimates? “Because the basic effects related to supply problems and there energy costs They were stronger than expected “, De Guindos ruled. These ‘bottlenecks’, adds de Guindos, could last longer than expected, even in 2022. It follows that” there is a risk that inflation will not fall as quickly “as is was esteemed.

And when asked whether inflation could become uncontrollable, the vice president replied that in the current uncertainty it is crucial to examine inflation expectations, to see at what level they will stabilize. “For now, they are slightly below our 2% inflation target, which is largely reassuring,” he says. “But we must remain vigilant to avoid second-round effects through wages. If so, the upward trend in inflation may be more lasting. We have not yet seen such effects. However, it should be noted that due to the pandemic, most wage negotiations have been postponed to late 2021 and early 2022. So we should be very careful. “

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