| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | -0.5% | -0.5% | -0.5% |
| Year over Year | 4.9% | 4.9% | 4.9% |
Highlights
French inflation stabilised in September but remained above the low point touched in July.
The consumer price index declined by 0.5 percent last month, leaving the annual rate of inflation steady at 4.9 percent. Both the monthly and year-over-year results were in line with consensus estimates and confirmed the flash data released late last month.
That leaves the inflation rate unchanged from August, but above the 4.3 percent pace touched in July. Inflation peaked at 6.3 percent in February, well below the apex hit in the wider eurozone.
The core inflation index declined by 0.1 percent last month, taking the annual rate to 4.6 percent, also unchanged from August, matching the slowest pace since September of 2022.
Food prices slipped by 0.3 percent last month the first decline since October of 2021 -- reversing the 0.3 percent gain recorded in August. That took the annual rate down to 9.7 percent from 11.2 percent, the sixth consecutive fall.
The HICP declined by 0.6 percent last month (unrevised from the flash estimate), leaving the annual rate at 5.7 percent, slightly higher than the earlier reading of 5.6 percent. That leaves inflation close to three times the European Central Bank's two percent target, despite the decline from a peak of 7.3 percent in February.
The latest data could allow the French government to meet its year-end inflation forecast of 4.4 percent, according to updated predictions released on Thursday; that's a slight upward revision to previous forecasts.
The stabilisation in inflation comes amid a sense of differing opinions emanating from the ECB's governing council, which appears to be split over whether to continue hiking interest rates. According to minutes of the September rate setting meeting released on Thursday, the decision to raise interest rates by 25 basis points"was generally seen as a close call."
Francois Villeroy de Galhau, governor of the Banque de France, sees current rates at an appropriate level, according to his comments on the sidelines of the World Bank/IMF meetings in Marrakech on Thursday. ECB President Christine Lagarde will speak in a panel discussion at the same gathering later on Friday.
The latest data leave the RPI at minus 7 and RPI-P at 10, suggesting that the French economy is performing largely within expectations.
The consumer price index declined by 0.5 percent last month, leaving the annual rate of inflation steady at 4.9 percent. Both the monthly and year-over-year results were in line with consensus estimates and confirmed the flash data released late last month.
That leaves the inflation rate unchanged from August, but above the 4.3 percent pace touched in July. Inflation peaked at 6.3 percent in February, well below the apex hit in the wider eurozone.
The core inflation index declined by 0.1 percent last month, taking the annual rate to 4.6 percent, also unchanged from August, matching the slowest pace since September of 2022.
Food prices slipped by 0.3 percent last month the first decline since October of 2021 -- reversing the 0.3 percent gain recorded in August. That took the annual rate down to 9.7 percent from 11.2 percent, the sixth consecutive fall.
The HICP declined by 0.6 percent last month (unrevised from the flash estimate), leaving the annual rate at 5.7 percent, slightly higher than the earlier reading of 5.6 percent. That leaves inflation close to three times the European Central Bank's two percent target, despite the decline from a peak of 7.3 percent in February.
The latest data could allow the French government to meet its year-end inflation forecast of 4.4 percent, according to updated predictions released on Thursday; that's a slight upward revision to previous forecasts.
The stabilisation in inflation comes amid a sense of differing opinions emanating from the ECB's governing council, which appears to be split over whether to continue hiking interest rates. According to minutes of the September rate setting meeting released on Thursday, the decision to raise interest rates by 25 basis points"was generally seen as a close call."
Francois Villeroy de Galhau, governor of the Banque de France, sees current rates at an appropriate level, according to his comments on the sidelines of the World Bank/IMF meetings in Marrakech on Thursday. ECB President Christine Lagarde will speak in a panel discussion at the same gathering later on Friday.
The latest data leave the RPI at minus 7 and RPI-P at 10, suggesting that the French economy is performing largely within expectations.
Market Consensus Before Announcement
No revisions are expected to the provisional data leaving a 0.5 percent monthly fall and a 4.9 percent annual inflation rate, unchanged from the final August print.
Definition
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.
Description
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.
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.
