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France Inflation At 20-Month Low

France’s consumer price inflation softened to a 20-month low in October on slower growth in energy and food prices, preliminary estimate from the statistical office INSEE showed on Tuesday.

Consumer price inflation slowed to 4.0 percent in October, as expected, from 4.9 percent in September. The rate reached the lowest since February 2022.

EU harmonized inflation also weakened in October, to 4.5 percent from 5.7 percent registered in the prior month. The rate matched expectations.

Month-on-month, the consumer price index posted a 0.1 percent increase, in contrast to the 0.5 percent decrease in September. Prices were expected to gain 0.2 percent.

Likewise, the harmonized index of consumer prices moved up 0.2 percent, as expected and reversed a 0.6 percent drop in the prior month.

The trend towards disinflation is well underway, but it will take time, ING economist Charlotte de Montpellier said. The fall in inflation is likely to be much slower in the coming months, the economist noted.

Data revealed that there were slower increases in prices of food, energy and manufactured goods prices. Food inflation came in at 7.7 percent, down from 9.7 percent in September.

Energy price growth eased sharply to 5.2 percent from 11.9 percent a month ago. Manufactured goods prices grew 2.3 percent after a 2.8 percent gain.

Meanwhile, services prices grew at a faster pace of 3.2 percent, following September’s 2.9 percent increase.

Another data from INSEE showed that domestic producer prices continued to decline in September. The annual decline in producer prices deepened to 1.7 percent from 1.4 percent in August.

On month, the producer price index moved up 0.7 percent, the same rate as seen in August.

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