Italian producer prices, a gauge of future inflation, rose 0.9 percent in May from April, and posted a 2.9 percent year-on-year increase, the biggest since May 2001. The increase in producer prices in the euro-zone's third-largest economy was fuelled by oil and metal prices, which were up 16.9 percent and 11.8 percent year-on-year respectively, national statistics agency ISTAT said on Monday. The figures were well above expectations. Economists polled by had forecast a median rise of 0.6 percent on the month and a 2.6 percent rise in annual terms. "Energy prices were as usual behind the surge," said Raj Gunaratna, an analyst at 4CAST in London. Energy prices were up 3.2 percent from April and 4.2 percent year-on-year.
The data showed that net of energy and utilities, price pressures at the factory gates were up 0.3 percent on the month, registering a 2.6 percent annual increase. Italy's PPI figures were in line with Spanish data released last week which showed producer price inflation at an annual rate of 3.8 percent in May, its highest level for more than three years. They were up 0.7 percent from April. Major Italian cities are set to release provisional June consumer price inflation figures at 1030 GMT. Istat's preliminary inflation data for Italy as a whole is due on Wednesday.///