- Prior +2.1%
- HICP +2.7% vs +2.6% y/y expected
- Prior +2.4%
French inflation picked up in August with stronger energy prices offsetting softer pressures from the services sector. The acceleration was primarily driven by energy costs, particularly petroleum products, which increased at a faster pace than in the previous month.
Food prices also contributed modestly to the uptick in inflation, while the decline in manufactured goods prices continued to ease. Meanwhile, services inflation softened slightly, helping to limit the overall increase in consumer prices. Tobacco prices rose at the same annual pace as in July.
On a monthly basis, the CPI is expected to increase 0.7% in August, following a 0.6% rise in July. The gain was largely driven by a seasonal rebound in manufactured goods prices, especially clothing and footwear, after summer sales had weighed on prices in the previous month.
Energy prices also moved higher during August, again reflecting rising petroleum product costs. Food prices increased, with fresh food providing a notable contribution. By contrast, services prices were broadly unchanged from July, while tobacco prices remained stable.
The harmonised measure of inflation (HICP), which is used for comparisons across the euro area, is expected to rise 2.7% y/y in August, accelerating from 2.4% in July. On a monthly basis, the HICP is projected to increase 0.8%, compared with 0.6% in the previous month.
The August figures indicate that France is experiencing a renewed inflationary pressure from energy prices, while underlying price pressures remain relatively contained.
This article was written by Giuseppe Dellamotta at investinglive.com.