The inflation rate in France rose to 3 percent on an annual basis during September, driven mainly by a sharp rise in energy and fuel costs, according to data from the French statistics office “INSI” released on Wednesday.
This represents a significant jump compared to the inflation rate of 2.4 percent in August, and also clearly exceeds the European Central Bank’s target of 2 percent, according to Agence France-Presse.
INCI said that energy price inflation rose to 21.2 percent during September, compared to an increase of 16.7 percent in the previous month.
Diesel prices, in particular, have reached record levels in France and a number of eurozone countries in recent weeks, as a result of the war in the Middle East.
This has increased analysts' expectations that the European Central Bank will continue to raise interest rates in the coming months to curb rising prices, which may put pressure on economic growth in the euro zone.
The European Central Bank raised its key interest rate to 2.5 percent earlier this month.
Germany and Italy, the other two largest economies in the European Union, are scheduled to release inflation data later Wednesday, before the comprehensive euro zone inflation reading is released on Friday.
The performance of Gulf stock markets was mixed in early trading, Wednesday, after US President Donald Trump denied reports of his willingness to ease sanctions imposed on Iran, at a time when Qatar is intensifying mediation efforts to reduce the escalation between Washington and Tehran.
The main index of the Saudi market rose 0.3 percent, supported by a rise in the shares of “Al Rajhi Bank” by 1 percent, and “Saudi Aramco” by 0.6 percent.
The prospects for Saudi oil exports also improved with the resumption of tanker loading at the Yanbu terminal on the Red Sea, following the return of the “East-West” pipeline, according to navigation data and sources in the trade sector.
On the other hand, the Qatari index fell 0.6 percent, affected by a 1 percent drop in Qatar National Bank’s stock, while the Dubai index rose 0.1 percent, supported by a 0.3 percent rise in Emirates NBD stock. The Abu Dhabi index fell 0.1 percent.
The market movements came after US media reports reported that Trump might be willing to ease sanctions on Iran and release frozen Iranian funds as part of a final agreement, in exchange for Tehran making “tangible progress” in the nuclear file. But Trump denied this, saying that he “did not offer them anything.”
At the same time, Qatar is continuing mediation efforts between Washington and Tehran to contain the conflict that has been going on for seven months, while Trump repeated his expectation that Iran will surrender soon.
The Turkish authorities froze the assets of the former minister and vice president of the ruling Justice and Development Party, Fatma Betul Sayan Kaya, and her husband, Ilyas Kaya, in the latest development in an investigation related to an investment fund crisis that shook the markets and affected more than 455,000 investors.
The Istanbul Public Prosecution said, in a statement, that it had sent to the relevant institutions a request to freeze all of Kaya and her husband’s assets, as part of ongoing investigations into transactions in the capital markets.
Kaya resigned from her position in the leadership of the ruling party at the weekend, after accusations launched by the opposition New People's Party that she and her husband had made large profits from stock trading before the outbreak of the investment funds crisis. Kaya denies committing any wrongdoing, and said that her resignation came to bear “political responsibility” and allow the investigation to be conducted in an independent and impartial manner.
According to the accusations reported by the opposition, the couple invested about 63 million liras ($1.3 million) in shares during April, before selling them in September for about 1.3 billion liras ($26.5 million). The authorities have not yet announced that these numbers represent a final result of the investigation. Kaya served as Minister of Family between 2016 and 2018.
The expansion of the investigation coincided with a meeting held by President Recep Tayyip Erdogan, on Tuesday, with his economic aides to follow up on the repercussions of the crisis, after he had previously defended his party’s record, stressing that the “Justice and Development Party” could not be tainted by this issue.
The crisis exploded in mid-September, after a number of investment funds were unable to meet investors' requests to recover their money, which led to a wave of turmoil in the Turkish stock market. The Turkish Capital Markets Authority ordered the liquidation of 131 funds managed by 7 companies, with the value of their assets amounting to about 18 billion dollars, while the authority said that 455,758 individual investors were affected by the decision.
The authorities are investigating transactions related to a number of companies and funds, while previous measures included freezing the assets of individuals and entities and arresting suspects in the case. The government also formed the “Funds Coordination Council,” headed by the Vice President, to supervise and accelerate the liquidation process and protect investors’ rights.
