France Flash Inflation Softer Than Expected

The latest set of July flash inflation prints from France saw HICP and CPI both on an annual and monthly basis come in softer than expected.

• HICP came in at +2.6% Y/Y (vs 2.7% consensus, 2.5% prior) and 0.2% M/M (vs 0.3% consensus, 0.2% prior).
• CPI came in at 2.3% Y/Y (vs 2.4% consensus, 2.1% prior).
• Looking at the national CPI:
  • Services CPI (which makes up 51.6% of the national CPI index) fell to 2.5% Y/Y (vs 2.9% in June) - the lowest reading since March 2022. On a monthly basis however, services prices rose 1.2% (vs 0.3% prior), driven by the seasonal increase in transport and accommodation prices, which had been highlighted ahead of the release due to the Olympics.
  • Meanwhile, energy prices increased to 8.5% Y/Y (vs 4.8% prior), on a monthly basis energy rose 1.5% (vs -0.8% in the prior month), which was expected given the c. 12% increase in gas prices announced by the regulator.
  • The non-fresh food component was 0.3ppt lower than last month at 0.5% Y/Y.
  • Finally, Non-Energy Industrial Goods remained flat on a yearly basis for the third consecutive month.