French inflation remains soft in June, holds back on seasonal fall in prices

Consumer prices in France remained on the softer side in June, held back largely due to seasonal fall in prices of manufactured goods and fresh produce.

The consumer price index for the Eurozone's second-largest economy in June rose 0.1 percent on month and 0.2 percent on year, data released by the statistics agency Insee showed. However, economists polled by the Wall Street Journal had forecast a 0.2 percent rise on month and a 0.3 percent rise on year.

The weaker-than-expected figures underscore the challenge faced by the European Central Bank to drive inflation back toward its target of 2 percent. Still, the measure watched by the central bank, the harmonized measure of annual price change known as HICP remained firmer in June, rising 0.3 percent on year after a 0.1 percent rise on year in May.

Separately, the statistics agency also reported France's producer price index for May. The PPI index rose 0.3 percent on month in May as the prices of refined oil products increased. On year, however, producer prices remained weak and recorded a 3.5 percent decline in May.

Meanwhile, prices in June were supported by a rise in the price of oil products and a rebound in the price of services at the start of the summer tourist season. But the beginning of the regulated sales season weighed on the price of manufactured goods and fresh produce prices declined, Insee reported.