It is only when the well is dry that we know the value of the water. The French got the answer this Tuesday at 8:45 a.m. INSEE confirmed its own provisional estimate of August 28: consumer prices increased by 2.4% year-on-year in August, compared to 2.1% in July. No surprise, therefore, but a confirmation that weighs heavily a few weeks before the 2027 budget decisions. And the main accused has a familiar name: oil.
The final figure for August inflation in France
Over one month, prices increased by 0.7%, after +0.6% in July, driven by the seasonal rebound in clothing after the summer sales. But it is energy that is pulling the whole thing upwards: its prices jumped by 16.7% over one year, compared to 12.6% in July, mainly because of petroleum products. Fresh products are also accelerating, to +5.9% year-on-year compared to +3.8% the previous month.
Conversely, prices of services slowed slightly and those of manufactured products continued to decline, to −0.4% year-on-year after −0.7% in July. The harmonized index, the one used for European comparisons, has also been revised: it stands at a final 2.6%, one notch below the first provisional reading of 2.7% published at the end of August.
As early as July, Le Journal du Coin noted that gas had increased by 17.7% and fuel by 20.7%, with diesel in the lead (+24.1%). The month of August confirms and amplifies the trend rather than correcting it.
Oil, conductor in spite of itself
Just look at the barrel to understand. Brent has crossed the $100 mark in recent days, trading around $107.5 on Tuesday with a high of $110, driven by a situation that is still not resolved in the Strait of Hormuz.
Iran's Supreme National Security Council repeats that the strait, which carries about a fifth of the world's crude transported by sea, will not reopen until Washington "corrects its behavior." The Saudi East-West pipeline, supposed to provide a bypass route, also remains at a standstill after a series of drone attacks.
It usually takes several weeks from barrel to pump. The August shock is therefore only the translation, with a delay, of a geopolitical tension which has lasted since the summer. There is no indication that it will be settled before the next estimate, on September 30.
For Bercy, the note comes at the worst time. Inflation expected for 2027 is around 1.7% according to the Banque de France, almost four times the room for maneuver already granted to civil ministries excluding Defense. Inflation which is rising faster than expected today is further complicating the budgetary equation that Bercy must complete in the coming weeks.
For crypto market players, this cocktail is not trivial. Inflation driven by energy, a deficit that is barely tightening and a Bank of France which already anticipates 1.7% in 2027: this is exactly the soil on which the narrative of Bitcoin thrives as a bulwark against monetary devaluation. The debate on the place of digital assets in the face of persistent inflation is therefore not about to die down.
