French consumer prices rise slightly in June

Consumer prices in June rose slightly as increase in prices of energy was partly countered by a drop in prices of fresh food and certain manufactured goods at the start of the sales season. France’s statistics agency INSEE stated that the French consumer price index rose 0.1 percent month-on-month in June, following a rise of 0.4 percent in May. Inflation, on a year-on-year basis, rose 0.3 percent in the month.

The monthly rise in June was due to the strengthening of prices of petroleum product for the fourth consecutive month, and from the seasonal recovery in prices of certain services. Energy prices grew robustly in June by 2.2 percent on month-on-month basis. On a yearly basis, energy prices dropped 3.1 percent, as compared with the drop of 5.7 percent in May. The monthly rise was because of 4 percent rise in prices of petroleum product, as a result of a rebound in crude oil prices since the start of 2016.

Meanwhile, prices of services rose slightly by 0.3 percent in June because of the seasonal price rise for certain services before the summer holidays, stated INSEE. On a year-on-year basis, prices of services rose 1 percent in the month, same as in May. Therefore, accommodation services prices rose 5.1 percent, almost close to the rise of 4.9 percent recorded in June 2015.

In similar manner, airfares rose 4.9 percent; but they continued to decline on the year-on-year basis due to the past declines in oil prices. On the contrary, package holidays dropped 2.1 percent in June.

French core inflation indicator rose 0.1 percent in June 2016 for the fourth consecutive month. On a year-on-year basis, the indicator rose 0.7 percent, as in May. The Harmonised Index of Consumer Prices, a measure used by the ECB, accelerated 0.1 percent on month-on-month basis. On a year-on-year basis, the HICP index rose 0.3 percent in June, noted INSEE.