Financial News: French Inflation Accelerates In June

French Inflation Accelerates In June

06/27/2025 - 05:14:00 (RTTNews)

(RTTNews) - France's inflation accelerated more than expected in June largely due to higher services costs but the overall rate remained below the 2 percent target, preliminary estimate from the statistical office INSEE showed on Friday.

Consumer prices increased 0.9 percent year-on-year in June, faster than the 0.7 percent rise in May. The rate was forecast to remain unchanged at 0.7 percent.

EU harmonized inflation stood at 0.8 percent, while it was expected to rise moderately to 0.7 percent from 0.6 percent in May. Final data is due on July 11.

Although inflation accelerated in June, it remained well below the European Central Bank's target of 2 percent.

The increase in inflation reflects the acceleration in the prices of services and decreasing fall in energy prices. Services inflation increased to 2.4 percent from 2.1 percent, while energy costs dropped at a slower pace of 6.9 percent.

Food inflation rose slightly to 1.4 percent from 1.3 percent and manufactured product prices registered a steady fall of 0.2 percent.

In a separate communiqué, the INSEE said producer prices rose for the first time in 18 months in May. Producer prices rose 0.2 percent in May from a year ago, following a 0.7 percent fall in April.

Another data showed that consumer spending growth softened in May as the rebound in energy consumption was partially offset by the decline in food and engineered goods consumption.

Household consumption grew 0.2 percent month-on-month in May, following April's 0.5 percent increase. However, the rate was better than the forecast of 0.1 percent.

Energy consumption advanced 2.2 percent, while food consumption dropped 0.4 percent and consumption of manufactured goods slid 0.3 percent, data showed.

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