In March 2025, France's inflation remained subdued, with the consumer price index (CPI) rising by 0.8 percent year-over-year, the same pace as in February, masking diverging trends. On one hand, service prices, especially insurance, and food pricesdriven by fresh produceaccelerated. On the other hand, continued declines in energy and manufactured goods prices, alongside a slight slowdown in tobacco inflation, acted as balancing forces.

On a monthly basis, consumer prices rose by 0.2 percent after remaining flat in February. This modest rise was primarily attributed to seasonal increases in clothing and footwear, reflecting typical spring trends. However, price growth in services lost some momentum, and energy prices declined again, further dampening overall inflationary pressure.

The harmonised index of consumer prices (HICP), used for European comparisons, mirrored these patterns, rising 0.9 percent year-over-year and 0.2 percent over the month. Altogether, the data point to a low-inflation environment where household purchasing power remains relatively stable, although sectoral price shiftsparticularly in essentials like food and insurancemay still impact consumer sentiment. This latest update leaves the RPI at minus 14 and the RPI-P at minus 10, meaning that economic activities are slightly behind market expectations of the French economy.

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.