France: Inflation slows in July
August 12, 2011
In July, consumer prices dropped 0.4% over the previous month, contrasting the 0.1% increase recorded in June. As a result, annual inflation fell from 2.1% in June to 1.9% in July, which was below market expectations of a 2.2% rate. According to the National Statistical Institute (INSEE), the July reading reflected lower prices for clothing and footwear, due to summer sales, as well as for food. The core inflation index, which excludes more volatile categories such as oil as well as fruit and vegetables, also dropped 0.2% in July, contrasting June's 0.1% increase. Annual core inflation slowed from 1.2% in June to 0.9% in July. Finally, annual average HICP inflation (based on the harmonized index of consumer prices) remained unchanged from June's 2.0%, the highest level since May 2009.