| Actual | Previous | |
|---|---|---|
| Month over Month | 0.2% | 0.4% |
| Year over Year | 1.0% | 1.0% |
| HICP - M/M | 0.3% | 0.4% |
| HICP - Y/Y | 0.9% | 0.9% |
Highlights
Consumer inflation is expected to remain tame in July, rising 0.2 percent from June and 1.0 percent year-on-year, according to preliminary estimates released today. The monthly expected change is a slowdown from June's 0.4 percent while the year-on-year rate is the same.
Energy prices continue to act as mitigating factor, and are seen declining 7.2 percent, year-on-year, in July from minus 6.7 percent in June, primarily due to a basis effect on gasoline.
Food prices are seen up 1.6 percent year-on-year in July from June's 1.4 percent increase, with fresh food also 1.6 percent higher compared to 1.2 percent in June. Prices for services are also seen ticking higher from their June result of 2.4 percent to 2.5 percent in July compared to a year ago.
The harmonized index (HICP) which allows for comparison with other European economies is expected to be up 0.9 percent year-on-year in July, the same rate as in June. The monthly rate is expected to slow to 0.3 percent in July from 0.4 percent in June.
French inflation has been subdued relative to some other European economies. For now, overall inflation in Europe isn't likely to be of concern to policy makers at the European Central Bank, but with the EU's trade agreement with the US, pressures could start building.
Energy prices continue to act as mitigating factor, and are seen declining 7.2 percent, year-on-year, in July from minus 6.7 percent in June, primarily due to a basis effect on gasoline.
Food prices are seen up 1.6 percent year-on-year in July from June's 1.4 percent increase, with fresh food also 1.6 percent higher compared to 1.2 percent in June. Prices for services are also seen ticking higher from their June result of 2.4 percent to 2.5 percent in July compared to a year ago.
The harmonized index (HICP) which allows for comparison with other European economies is expected to be up 0.9 percent year-on-year in July, the same rate as in June. The monthly rate is expected to slow to 0.3 percent in July from 0.4 percent in June.
French inflation has been subdued relative to some other European economies. For now, overall inflation in Europe isn't likely to be of concern to policy makers at the European Central Bank, but with the EU's trade agreement with the US, pressures could start building.
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.
