French January HICP inflation set to print at -0.3% yoy: Societe Generale

Quotes from Societe Generale Cross Asset Research:

-In December, the deceleration was fuelled by the marked slowdown in the energy component, from -1.1% yoy to -4.4% yoy (cutting 28bp from the headline rate).

-In January, the energy deflation should remain limited due to one-off factors: a rise in carbon tax, CSPE contribution (+3€), electricity tariffs (+2.5%), gas tariffs (+1.8%).

-On the downside, the January VAT hike (0.6pp across the board) should fall off the annual comparison. Yet the effect will be spread over January and February as we recall that many retailers had delayed the VAT hike in January last year to early February.