French CPI inflation accelerates 0.2 pct year-on-year in August

The provisional estimate by France’s official statistical office showed that the nation’s consumer price index accelerated in August on a year-on-year basis. However, inflation continued to be below the targeted level.

According to INSEE, inflation in France accelerated 0.2 percent, the same as in the earlier two months. The acceleration is mainly driven by the dynamism of service prices, which are partially countered by declines in the prices of manufactured products and energy. The Harmonised Index of Consumer Prices rose 0.4 percent, the same as in July.

On a sequential basis, consumer prices were up 0.3 percent in August, a slight slowdown from 0.4 percent recorded in July. Consensus expectations were for a 0.4 percent rise. Seasonal rises in the manufactured product prices at the end the summer sales are expected to have been the main driver of the price rise.

According to INSEE, prices of food are expected to continue rising, particularly due to fresh foodstuffs. These rises are expected to be partially countered by an additional drop in petroleum products prices. Inflation gauged by the Harmonised Index of Consumer Prices in month-on-month terms rose 0.3 percent.