French headline inflation likely rose in September, likely to climb above 1 pct by end-2016

France’s consumer price index inflation and the HICP inflation both are expected to have accelerated in September. The CPI inflation had stayed stabled for the third consecutive month, and is expected to have risen to 0.3 percent year-on-year in September, the highest since June 2015, stated Societe Generale in a research note.

Meanwhile, HICP inflation is also expected to have improved mildly to 0.5 percent year-on-year, the highest since October 2014. The rebound in HICP inflation is possibly due to lesser annual drop in the energy component, which is expected to have rebounded to -1.4 percent year-on-year from -2.4 percent year-on-year in spite of a flat profile in sequential terms, according to Societe Generale.

Prices of food are also likely to have continued rebounding in August. Meanwhile, core inflation is anticipated to have remained weak, stable at 0.5 percent year-on-year. Non-energy industrial goods prices and services, both are expected to have remained the same. CPI, excluding tobacco is likely to have come in at 0.4 percent.

“Looking ahead, inflation should recover at a faster pace, climbing above 1.0 percent by the end of the year led by base effects from energy prices”, added Societe Generale.