FX.co ★ French Inflation Lowest In Over 3 Years, Producer Prices Rise Further

France's consumer price inflation in September decreased to its lowest level in over three years, primarily due to a decline in energy prices, according to a provisional estimate from the statistical office INSEE released on Friday.

A separate official report indicated a consecutive rise in producer prices for the second month in August.

The consumer price index increased by 1.2 percent year-over-year in September, a slowdown from the 1.8 percent rise in the previous month. This was below economists' expectations, who had predicted a reduction to 1.6 percent.

The notable decrease in inflation is largely attributed to a drop in energy prices, especially petroleum products, INSEE stated.

Energy prices saw a 3.3 percent annual decline in September, compared to a 0.4 percent rise in August. Meanwhile, food inflation remained stable at 0.5 percent, and prices for manufactured goods fell by 0.3 percent. Inflation in services moderated to 2.5 percent from 3.0 percent.

On a monthly basis, consumer prices decreased by 1.2 percent in September, reversing the 0.5 percent rise observed in August.

EU-harmonized inflation also eased to 1.5 percent from 2.2 percent the month before, with the Harmonized Index of Consumer Prices (HICP) showing a monthly decrease of 1.2 percent.

France's household consumption rose steadily by 0.2 percent on a monthly basis in August, contrary to an anticipated decline of 0.1 percent. This slight increase was mainly driven by an acceleration in food consumption, which increased by 0.8 percent.

In a separate report, INSEE revealed that industrial producer prices in the domestic market rose by 0.2 percent month-on-month in August, a slight decrease from the 0.3 percent increase in the preceding month.

The upward trend in August was driven by a 2.1 percent rise in prices for mining, energy, and water products. In contrast, the prices of manufactured goods saw a decline of 0.4 percent.

On an annual basis, the decline in producer prices became more pronounced, deepening to 6.3 percent from 5.7 percent in July.