France Inflation Rises To 5-Month High

(RTTNews) - French consumer inflation accelerated to a five-month high in January largely on energy and manufactured product prices but harmonized inflation remained stable below the European Central Bank's 2 percent target, provisional data from the statistical office INSEE showed Friday.

Consumer prices registered an annual increase of 1.4 percent in January, following December's 1.3 percent rise.

The 1.4 percent was the highest since last August, when prices grew 1.8 percent. Nonetheless, inflation stayed slightly below economists' forecast of 1.5 percent.

The rebound in prices of manufactured product and a further acceleration in those of energy were partly offset by the slowdown in prices of service and tobacco, the statistical office said.

Month-on-month, consumer prices dropped 0.1 percent, in contrast to the 0.2 percent increase in the previous month and the forecast of no change.

EU harmonized inflation was 1.8 percent in January, the same as in December. Month-on-month, the harmonized index of consumer prices dropped 0.2 percent, offsetting a 0.2 percent rise in the previous month.

Economists had forecast the HICP to climb 1.9 percent annually and to remain flat on a monthly basis.

Final inflation results of January are due on February 18.

Another report from the statistical office INSEE showed that producer prices declined for the thirteenth straight month in December. Producer prices slid 3.8 percent year-on-year after a 4.7 percent fall in November. They were around 26 percent above their 2021 average level.

On a monthly basis, producer prices increased 1.0 percent, which was much weaker than the 3.7 percent increase in November.

ING economist Charlotte de Montpellier said overall inflation in France is likely to remain close to the current level on average over 2025, before returning to close to 2 percent in 2026.