France: Inflation accelerates in August
September 13, 2011
In August, consumer prices rose 0.5% over the previous month, contrasting the 0.4% drop recorded in July. As a result, annual inflation rose from 1.9% in July to 2.2% in August, which marked the highest level since October 2008 and beat market expectations of a 2.0% rate. According to the National Statistical Institute (INSEE), the August reading reflected an increase in manufacturing goods prices following the end of the summer sales, as well as higher energy prices. The core inflation index, which excludes more volatile categories such as oil as well as fruit and vegetables, also rose 0.4% in August, contrasting July's 0.2% drop. Annual core inflation rose from 0.9% in July to 1.2% in August. Finally, annual average HICP inflation (based on the harmonized index of consumer prices) remained unchanged from July's 2.0%, the highest level since April 2009.