Consumer prices provisionally advanced a surprisingly sharp 0.5 percent on the month in August. This put annual inflation at 1.7 percent, up 0.2 percentage points from the final July mark and the highest rate since April 2017.
The flash HICP moved in the opposite direction with a 0.1 percent monthly dip that reduced its annual rate from 1.9 percent to also 1.7 percent. Note that the monthly decrease here was mainly due to summer sales of clothing and footwear which are not taken into account in the national CPI.
The acceleration in the yearly CPI rate was largely attributable to higher rates in transport (2.9 percent after 1.7 percent) and, to a lesser extent, processed food (2.3 percent after 1.8 percent). Partial offsets were provided by energy (7.6 percent after 7.9 percent) and unprocessed food (3.0 percent after 3.6 percent). As a result, the core CPI, which excludes unprocessed food and energy, climbed a couple of ticks to 0.9 percent.
Despite August's surprising strength, underlying inflation currents are still soft and with the retail sector continuing to struggle, look likely to remain so through year-end.