French consumer price inflation accelerates in December on sharp rebound in energy prices

French consumer price inflation accelerated sequentially, driven by higher prices in energy and food. According to the French official statistical office, INSEE, on a month-on-month basis, the headline inflation came in at 0.4 percent, a rise from 0.1 percent seen in the prior month. The rebound in services prices and manufactured products also helped the consumer price index. Energy prices accelerated to 0.8 percent sequentially in December from 0.3 percent in the prior month. Food prices rose to 0.6 percent from 0.1 percent, while the services inflation rebound to +0.5 percent from -0.2 percent in the prior month. Manufactured products also rebounded in the month to 0.2 percent after falling 0.1 percent in November. Tobacco prices remained stable at 6 percent.

Meanwhile, on a year-on-year basis, consumer prices rose to 1.5 percent in the month from November’s 0.2 percent and October’s 0.8 percent. This is the second straight month of acceleration, driven by a sharp recovery in energy prices and a slight rise in prices of services. Energy prices rebounded to +2.6 percent after falling for two consecutive months by 0.6 percent and 1.6 percent in November and October, respectively. The rise in energy prices was driven by petroleum products.

On a year-on-year basis, services prices accelerated a bit to 1.4 percent in December from November’s 1.3 percent, driven by the rise in transport services that rose 2.6 percent. Airfares also rose 2.7 percent. Prices of housing-related services rose 0.8 percent, while those of “other services” rose 1.6 percent.

Meanwhile, manufactured product prices dropped 0.3 percent in December, a slowdown in the fall from prior month’s fall of 0.6 percent. Prices of clothing and footwear fell 0.3 percent. On the other hand, food prices rose 2.1 percent year-on-year.

On a year-on-year basis, the core inflation accelerated marginally to 1.1 percent in December from 1 percent in November. The Harmonized Index of Consumer Prices (HICP) rose 0.5 percent sequentially, while it accelerated to 1.6 percent on a year-on-year basis.