Consumer prices experienced a significant 0.5 percent rise in August, primarily due to the rebound in manufactured products such as apparel and footwear, which increased by 6.2 percent following substantial declines in July. Nevertheless, energy prices experienced a 1.3 percent fall, attributed to a significant decrease in petroleum costs and a precipitous decline in electricity prices.

Year-over-year, inflation decreased from 2.3 percent in July to 1.8 percent, primarily due to the deceleration in energy prices. Nevertheless, the cost of services continued to increase, with a 3.0 percent rise. The slight increase in core inflation to 1.7 percent indicates that there are still latent inflationary pressures. This delicate balance between declining energy costs and increasing service prices is indicative of a dynamic inflation environment in which short-term fluctuations, such as post-sale rebounds, mask more subdued long-term trends.

The harmonised index of consumer prices also demonstrated a decrease in annual growth, with a reduction from 2.7 percent in July to 2.2 percent, suggesting a general softening of the inflation trajectory. Over the month, however, it increased to 0.6 percent from 0.2 percent in July. The September update raises the RPI to 11 and RPI-P to 15, meaning that the French economy is outperforming market expectations.

No revisions are expected leaving annual CPI inflation at 1.9 percent, down from 2.3 percent, and the HICP rate at 2.2 percent, down from 2.7 percent and just a couple ticks above the ECB's target.

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.