In 2014, the Italian Harmonized Indices of Consumer Prices (HICP), which provide a measure of the effects of inflation on the Italian households, divided in subgroups defined according to the consumption expenditure level, reflect the general slowdown trend of prices.
In the fourth quarter of 2014, inflation rates for population subgroups, varied in a range between -0.2% of the first subgroup (i.e. the 20% of those with the lowest equivalent expenditure) and 0.3% of the last subgroup (the 20% of population with the highest equivalent expenditure). In the same period, headline inflation, as measured by HICP, was 0.1%.
The slowdown of inflation in 2014 (+0.1% in the fourth quarter, down from +0.5% in the first quarter) concerned all household subgroups. The inflation rate for the households with the lower level of expenditure declined to -0.2% in the fourth quarter as compared to 0.4% in the first quarter of the year; in the same time interval, the inflation rate for the last subgroup of households showed a decrease to 0.3%, from 0.5%.
Therefore, the inflation slowdown in 2014 was wider for the households with the lowest level of expenditure, strengthening a trend already emerged in 2013. This dynamics was mainly due to the reduction of prices of Energy and Processed and Unprocessed food, whose weight on the budget of the households with the lowest level of expenditure is twice with respect to the households with the highest level of expenditure.