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Bull Rally Accelerates


Economists Survey Raises 2021 CPI Forecast To 4.9%

MNI (London)

MAY FLASH HICP +0.4% M/M, +1.8% Y/Y; APR +1.6% Y/Y

MAY FLASH CPI +0.3% M/M, +1.4% Y/Y; APR +1.2% Y/Y

  • Annual inflation jumped to 1.8% in May, up from 1.6% seen in April, hitting the highest level since Dec 2018 where the index also stood at 1.9%.
  • The headline HICP was in line with market forecasts (median 1.8%)
  • May's uptick was driven by another sharp increase in energy prices, rising by 11.8% to the highest level since Oct 2018, as prices are compared to the low figures seen at the beginning of the pandemic.
  • Energy inflation recorded negative rates throughout the pandemic and registered the first increase in Mar 2021.
  • Service inflation slowed to 1.0% in May, down from 1.2% seen in Apr, showing a 3-month low.
  • Similarly, tobacco prices decelerated to 5.3% in May, down from 5.8% seen in Apr, while prices for manufactured products were flat.
  • Food inflation eased by 0.2% in May, its second decline in a row after having recorded positive rates since Nov 2016. The decline was again driven by a fall in prices for fresh food, down 3.0%.

Source: Insee

MNI London Bureau | +44 203-865-3814 |