France’s final HICP and CPI inflation likely confirmed flash readings in September

France’s final HICP and CPI inflation is expected to have stayed the same as the flash estimate in September. According to a Societe Generale research note, the final HICP and CPI inflation is likely to have confirmed the flash readings of 0.5 percent year-on-year and 0.4 percent year-on-year respectively. Improvement in energy prices due to base effects has helped inflation accelerate. Energy prices have positively contributed 22 basis points to the headline print.

Apart from improvement in energy prices, acceleration in services to 1.3 percent year-on-year in September from 0.7 percent year-on-year in August has also been a major driver of the pick-up inflation. It added 29 basis points to the headline figure.

However, certain gains were countered by the deceleration in food prices to 0.4 percent year-on-year in September from 1.5 percent year-on-year in August. Also, drop in manufactured products prices countered the gains. It fell to -0.6 percent year-on-year from -0.5 percent.

“Looking ahead, we expect inflation to recover at a faster pace, climbing to 1.0 percent by end-2016, primarily led by base effects from energy prices”, added Societe Generale.