French Inflation Increased In August

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French Inflation Increased In August

French Inflation Reached 5.7% In August Amid Energy Price Hike

During the month of August, the inflation in France increased a lot more than the market's expectations due to the high energy prices. At the same time, the food inflation actually turned lower, but it appears that was not enough to offset the increase in energy prices.

After the recent reading, the yearly inflation rate in France is not sitting at 6.7%, which is a big jump from a 5.1% inflation in July. So, within a month, French inflation jumped higher by 0.6%, which is a pretty big increase & is enough of a reason to raise alarms.

French Inflation Jumped By 0.6%

A well-known financial institution conducted a poll that forecasted that the yearly inflation in France would be 5.4% during August. Similarly, the upper range of the forecast was 4.7% while the lower range of 5.8%. After the results, it appears that the actual inflation value is just close to the lower range.

According to experts, energy prices have gone up significantly, which is contributing to the rise in inflation. During August, the food prices continued to decline for the 5th consecutive month. In addition, the prices of the manufactured services/products also decreased a little bit during August.

In August, the food prices increased by 11.1% while the value for July was 12.7% which signifies a slowdown. However, the energy prices jumped from -3.7% in July to +6.8% which pushed the yearly inflation higher by 0.6%.

Although the local government and the EU authorities are trying to control the food inflation, there isn't much that can be done about the energy prices. After all, energy prices are closely linked to the prices of oil products which have gone significantly higher in the past few months.

Meanwhile, the German labor market is also showing signs of worry as the number of unemployed workers has shown a rise during August. This is an indication that the EU countries will have to face multiple headwinds in the coming months.

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