ECONOMY

Italy’s Inflation Cools: Once among the highest in the Western world, the country’s inflation rate has been cut to a 25-year low of 3.7%, the government said. It was good news for Prime Minister Silvio Berlusconi’s conservative government as it tries to tame the country’s runaway budget deficit. With labor costs accounting for 60% of a company’s expenses, a 1992 accord between the government and unions scrapping the automatic linkage of pay hikes to inflation has been vital in the fight against rising prices. Figures for May show wage inflation growing just 2.5%.