Consumer Prices in France Increased Above Expectations in September

Consumer prices in France increased above expectations in September. According to the leading data published today by the French National Institute of Statistics and Economic Studies (INSEE), the consumer price index in the country increased by 3 percent on an annual basis in September.

Annual inflation, which was measured at 2.4 percent in August and reached its highest level since February, exceeded analysts' forecast of 2.8 percent.

According to calculations reported by Reuters agency, the annual increase in the European Union (EU) compatible consumer price index (CPI) was determined as 3.4 percent in September.

This data, which provides comparisons across the Eurozone, exceeded the 2.6 percent level in August. The expectation of 19 analysts participating in the Reuters survey was that the harmonized index would remain between 2.8 percent and 3.3 percent, reaching an average level of 3.1 percent.

When evaluated on a monthly basis, the national consumer price index decreased by 0.3 percent in September.

The EU compatible index, on the other hand, recorded a decrease of 0.4 percent in September, following a 0.7 percent increase in August; Market expectation was for a 0.5 percent decrease.

The main factor driving inflation up in France was the jump in energy and fuel costs.

According to INSEE data, the increase in energy prices, which increased by 16.7 percent on an annual basis in August, reached 21.2 percent in September.

Petroleum products and natural gas played a decisive role in the price increases. Diesel prices, especially in France and other Eurozone countries, have reached record levels.

This situation stems from the disruption of crude oil and processed fuel shipments from the Persian Gulf following the war launched by the USA and Israel against Iran at the end of February and the subsequent closure of the Strait of Hormuz.

Before these developments, consumer prices in France were increasing by approximately 1 percent on an annual basis.

Price pressure also spread to the food and service sectors.

The price increase in fresh food products increased from 5.9 percent in August to 9.9 percent in September.

General food prices, including fresh products, increased by 1.5 percent on an annual basis in September, following the 1.1 percent increase in August.

Tobacco prices increased by 3.3 percent on an annual basis, as in the previous month.

The price increase in the service sector increased from 1.9 percent to 2.2 percent, as the seasonal price decrease in accommodation and transportation items remained more limited compared to the previous period.

Prices of durable consumer goods decreased by 0.3 percent on an annual basis; There was a 0.4 percent decrease in this item in August.

On the other hand, according to the news of Le Figaro newspaper, the fact that inflation in France exceeded the 2 percent target of the European Central Bank (ECB) strengthened the expectations that the bank could continue to increase interest rates in the coming months.

It is predicted that the bank's possible new interest rate steps, which reduced the benchmark interest rate to 2.5 percent this month, may suppress economic growth in the Euro Zone.

Inflation figures for Germany and Italy, which will clarify the trend across the Union, will be announced to the public today, and all Eurozone data will be announced to the public on Friday.