ROME, March 31 - Italian consumer prices rose a provisional 2.7 percent in March from a year ago, national statistics agency Istat said on Monday, matching forecasts made by economists after data from 12 cities. Inflation accelerated from February when it was 2.6 percent, but economists said the rise was probably temporary, with dearer oil ahead of war with Iraq pushing up transport costs. Month-on-month Istat said prices in the euro zone's third-largest economy edged up 0.3 percent. "Energy-related and hotels & restaurant price rises are the main driver," said Kleopatra Nikolaou, an analyst at 4Cast in London. Hotels and restaurants jumped 4.0 percent year-on-year, and transport was not far behind, climbing 3.7 percent on an annual basis. At the other end of the spectrum, health services bucked the inflationary trend, falling 0.7 percent year-on-year.
Price pressures, along with the war in Iraq, are weighing on Italian consumer confidence. In a March survey by research institute ISAE, 89 percent of those polled thought prices were rising "quite a bit" or "a lot", up from 87 percent in February but half thought prices would stabilise in the next 12 months. Istat will release definitive price data on April 14. The EU-harmonised index of consumer prices increased at an annual rate of 2.9 percent, leaving Italy still substantially above the European Central Bank's self-imposed two-percent ceiling. Month-on-month the EU index rose 1.3 percent. The EU number used sale prices in February, hence the big monthly jump in March, Istat said. In the latest poll 43 out of 55 ECB-watchers expected the bank to leave interest rates unchanged on April 3, when it meets in Rome.//