French July Inflation Rate Confirmed at Near 6-1/2-Year High

France's annual inflation rate stood at 2.3 percent in July 2018, unchanged from the preliminary estimate and above June's 2 percent. It was the highest rate since March 2012, driven by higher prices of energy, services and tobacco.

Energy prices jumped 14.3 percent in July, following a 12.3 percent advance in the previous month, mainly boosted by cost of gas (17.3 percent vs 6.4 percent in June) and petroleum products (21.8 percent vs 21 percent). Additional upward pressure came from: services (1.3 percent vs 1.2 percent); tobacco (16.8 percent vs 16.3 percent); and food (1.9 percent, the same as in June), of which fresh food (6.4 percent vs 5.9 percent) and other food (1.2 percent, the same as in June).

Annual core inflation, which excludes public sector prices, the most volatile consumer prices and the tax measures, rose to 0.9 percent in July from 0.8 percent in June.

On a monthly basis, consumer prices declined 0.1 percent in July after being unchanged in June. This slight drop came from a seasonal fall in manufactured product prices (-2.8 percent) due to summer sales, partly offset by a rebound in services prices (1.1 percent), essentially in airfares with the beginning of school holidays. Energy prices rose at a softer pace (0.5 percent vs 0.9 percent in June). Finally, food prices recovered slightly (0.1 percent vs -0.2 percent).

The harmonised index of consumer prices rose by 2.6 percent from the previous year (vs 2.3 percent in June); and fell by 0.1 percent month-over-month (vs flat reading in June).

French July Inflation Rate Confirmed at Near 6-1/2-Year High

INSEE, France | Joana Ferreira |
8/14/2018 7:03:17 AM