PARIS (Reuters) – Year-on-year inflation accelerated more than expected in France in August due to the rebound in energy prices, preliminary data released by INSEE showed on Thursday.

The consumer price index (CPI) rose 4.8% over the twelve months to the end of August, against 4.3% to the end of July and 4.6% for the Reuters consensus.

The consumer price index harmonized according to European HICP standards, which allows comparisons with other countries in the euro zone, is up 5.7% over one year at the end of August against 5.1% at the end of July. Economists had forecast 5.4%.

The rebound is linked to the rise in energy prices, which rose 6.6% month on month after an upward revision of the regulated electricity tariff and a further increase in consumer prices. pump, two volatile elements excluded from the calculation of underlying inflation.

Food prices are expected to slow for the fifth consecutive month while remaining high, at 11.1%, according to preliminary data from INSEE. The same is true, but to a lesser extent, for manufactured goods and services.

Over one month, inflation calculated according to French standards should increase by 1.0% and the HICP by 1.1%, against respectively an increase of 0.1% and stability in July.

The trajectory of energy prices could limit the pace of disinflation.

“The hypothesis of further increases in the regulated tariff over the next two years would make it possible to close the gap with the tariff calculated in July by the Energy Regulation Commission, at the cost, however, of maintaining inflation above the 2% threshold throughout the next year”, write the economists of BNP Paribas.

Apart from this element, however, the process of disinflation seems to be underway.

“The continued fall in production prices in industry, as well as data from business surveys, continue to suggest an easing of inflationary pressures,” writes Julien Pouget, head of the business cycle department at INSEE.

(Written by Kate Entringer)

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