French inflation accelerated for another month. The consumer price index should rise 3.4 percent year on year in October, after 3.1 percent in September, according to INSEE’s provisional estimate, and 0.4 percent on the month after a 0.3 percent fall in September. The harmonised index should rise 3.8 percent on the year, after 3.4 percent.
Energy led for a fourth consecutive month, driven by gas and petroleum products, with energy prices up 24.1 percent on the year. Services inflation rose to 2.7 percent from 2.4 percent, driven by accommodation and transport services, which is the part of the print that matters for persistence. Food prices slowed slightly to 1.2 percent, with fresh food at 8.0 percent, and the decline in manufactured product prices eased to 0.2 percent. Tobacco rose 3.3 percent, the same pace as the previous month.
The price data arrive against a contracting economy. INSEE reported the previous day in its quarterly accounts that French GDP fell slightly in the third quarter, so France enters the ECB’s December meeting with inflation rising from energy and services while output shrinks.
INSEE cautions that the provisional results rest on a limited set of price observations and estimates for some fares not yet available, and that they should not be used for contractual revaluations. The final figures, due November 13, will show whether the services acceleration survives the full sample.