EUROPEAN INFLATION
France Final HICP data for September was a touch softer than the flash reading at 1.44% (vs 1.52% flash, 2.19% in August), and -1.30% M/M (vs -1.23% flash, 0.60% prior). Recall, flash HICP Y/Y came in 0.4pp below consensus.
- France national CPI came in marginally softer than flash at 1.10% Y/Y (vs 1.17% flash, 1.83% prior), -1.24% M/M (vs -1.17% flash, 0.53% prior) - the largest monthly decline since the start of the series in 1990.
- Seasonally adjusted national CPI softened to -0.62% M/M in September from 0.22% in August.
- Core CPI softened to 1.42% Y/Y from 1.74% in August.
- The marginally softer than expected CPI reading was driven by a sharp slowdown in energy prices (-3.3% Y/Y from 0.4% in August) as well as a bigger slowdown in services prices than estimated in the flash reading with services CPI printing 2.4% Y/Y (vs 2.55% flash, 3.01% in August).
- Manufactured products also declined by 0.3% Y/Y (vs -0.1% in August), whilst Food and Tobacco inflation remained broadly stable at 0.5% Y/Y and 8.7% Y/Y.
- On a monthly basis, CPI was again driven down by services printing -2.2% M/M (after 0.5% in August). This was due to the seasonal effect of the fall in transport prices (-13.5% M/M vs 1.4% prior): including air transport (-24.8% M/M vs 0.7% prior) and accommodation services (-17.2% M/M vs 7.2% prior), in part due to the summer holidays and Olympic/Paralympic Games.
The graph below on seasonally adjusted CPI highlights that whilst inflation momentum remains elevated it is gradually returning back to pre-pandemic levels.
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