According to INSEE data, inflation increased by 1.2% in October compared to the previous year. On the other hand, compared to the month of September, consumer prices remained relatively stable. This increase in inflation had an impact on the purchasing power of consumers, who had to face price increases in certain sectors. Despite this, the economic situation remains fragile and uncertain, with potential consequences for growth and overall economic activity.
Evolution of inflation in France
The latest INSEE report indicates that inflation in France increased from 1.1% in September to reach 1.2% in October. This increase is mainly explained by the decline in energy prices and the slowdown in service prices, according to the statistics institute.
Consumer price index in France
In September, the consumer price index recorded an increase of 1.1% year-on-year in France. This increase is lower than INSEE forecasts, which forecast inflation of 1.2% for this month. On the other hand, for the month of October, inflation reached 1.2%, which represents stability compared to the previous month.
As for the harmonized consumer price index (HICP), there was an increase of 1.5% in October, compared to 1.4% the previous month. This slight increase is notably due to the increase in the prices of energy, transport and food.
Impact on ECB monetary policy
The fall in inflation in France and the euro zone has led the European Central Bank to revise its key rates downwards. Indeed, since 2019, the ECB has not made such a decision. The governor of the Bank of France emphasizes that the risk of not reaching the inflation target is as great as that of exceeding it, which has influenced recent monetary policy decisions.
In summary, the inflation situation in France is marked by a slight increase in October, but remains below the 2% threshold. The energy, services and food sectors had a significant impact on the evolution of consumer prices, while the ECB responded accordingly by lowering its key rates to support the economy in the face of this downward trend in inflation.
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