France Inflation

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France: Inflation defies market expectations

February 22, 2012

In January, consumer prices fell 0.4% over the previous month, which contrasted the 0.4% increase recorded in December. The monthly drop came on the back of lower prices for manufactured goods, due to winter sales. As a result, annual inflation edged down from 2.5% in December to 2.3% contrasting market expectations that had inflation rising to 2.7%. The core inflation index, which excludes more volatile categories such as oil, or fruit and vegetables, fell 0.1% in January, which contrasted the 0.3% increase recorded in December. As a result, annual core inflation eased from 1.8% in December to 1.5% in January. Finally, HICP inflation (based on the harmonized index of consumer prices) inched down to 2.6% from 2.7% in December. Annual average HICP inflation remained unchanged at December's 2.3%.


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