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Inflation in France hits 14-month high

Inflation in France rose to a 14-month high in April amid rising energy and service prices, preliminary data from statistics office Insee showed on Friday.

In a separate communiqué, the statistics office showed that household consumption fell sharply in March due to a significant drop in purchases of manufactured goods.

Consumer price inflation rose to 1.3% in April, as expected, from 1.1% in March. This was the highest since February 2020, when inflation was 1.4%.

The growth occurred as a result of accelerated growth in prices for services and energy resources. The cost of services increased by 1.3%, while energy prices increased by 8.8%. Meanwhile, food prices fell 0.3%.

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On a monthly basis, consumer prices rose 0.2% from a 0.6% rise in March. Monthly inflation was also in line with economists’ expectations.

On an annualized basis, inflation, based on the harmonized consumer price index, rose to 1.7% from 1.4% in March. According to forecasts, this figure should have increased to 1.6%.

The harmonized consumer price index rose 0.3% month-on-month, up from 0.7% growth in the previous month. Economists had expected a reading of 0.1%. The final data should be submitted on May 12th.

Another Insee report showed that domestic producer prices jumped sharply to 4.5% year on year in March from 1.9% in February.

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On a monthly basis, producer prices were up 1.0% from a 0.9% rise in the previous month.

Household spending unexpectedly fell 1.1% month-on-month in March, in contrast to a 0.3% rise in February and economists’ forecast of + 0.4%.

The decline was largely due to a 3.7% drop in purchases of industrial goods.

Meanwhile, energy costs rose 1.3% and food consumption rose 0.8%.

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