Consumer prices were revised a little firmer in the final data for July. A 0.1 percent monthly gain was a tick stronger than the provisional estimate but still left the annual inflation rate unchanged at 4.3 percent, down from June's final 4.5 percent and its lowest reading since February 2022.

The final HICP matched its flat monthly flash print but its yearly rate was nudged a tick higher to 5.1 percent, now 0.2 percentage points short of its final June mark and some 2.1 percentage points above the ECB's target.

The monthly deceleration in the annual CPI rate was broad-based. Inflation in overall manufactured products (3.4 percent after 4.2 percent) declined sharply, only partly reflecting weaker posts for food (12.7 percent after 13.7 percent) and energy (minus 3.7 percent after 3.0 percent). Services (3.1 percent after 3.0 percent) moved in the other direction but the core rate still fell from 5.7 percent in June to 5.0 percent, matching its lowest reading since September 2022.

The slowdown in French headline and core inflation will go down well at the ECB but the central bank will be keeping a particularly wary eye on developments in the service sector. Today's update puts the French ECDI at 4 and the ECDI-P at 15. Economic activity in general continues to run just a little hotter than generally expected.

No revisions are expected to the provisional data.

The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI represent the main rates of inflation. The national CPI is released alongside the HICP, Eurostat's harmonized measure of consumer prices. A flash estimate was released for the first time in January 2016 and is now published towards the end of each reference month.

The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. As a member of the European Monetary Union, France's interest rates are set by the European Central Bank.

France like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). The HICP is calculated to give a comparable inflation measure for the EMU. Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies.

Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.

By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.