- The flash estimate for eurozone September HICP is due for publication next Monday. We see headline inflation decelerating to 1.2% yoy from 1.3%, with the core rate stable at 1.1% yoy. The slight downward move is expected to be mostly energy-driven.
- In Italy, we expect the preliminary CPI estimate for September to come in at -0.1% mom, 1.1% yoy (from 1.2% yoy in August). This outcome would be consistent with FOI ex-tobacco printing at 107.4 (+1.0% yoy).
- Important note: our inflation forecasts for Italy still include a 1pp VAT hike in October. The Italian government is rushing to find resources that will allow postponing the tax increase. The latest available information suggests that the government may succeed, but lacking any official communication up to date, we still pencil in the VAT hike in October. As a reference, the VAT hike is seen raising consumer prices in Italy by 0.3-0.4pp, and in the eurozone by less than 0.1pp.
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