French households are facing higher prices as inflation climbed more than expected in August, driven by soaring energy bills.
France – the EU’s second largest economy after Germany – recorded a 12-month inflation rate of 5.7 per cent last month, up from 5.1 per cent in July.
Analysts had predicted a lower rate in August, with a poll of 18 economists, conducted by Reuters, forecasting a rate of 5.4 per cent.
Higher prices: France – the EU’s second largest economy after Germany – recorded a 12-month inflation rate of 5.7% last month, up from 5.1% in July
The only good news was that food inflation was 11.1 per cent in August, from 12.7 per cent in July – but that was still almost twice the overall inflation rate. Energy prices, which fell 3.7 per cent in July, rose 6.8 per cent.
‘This rise is due to a rebound in energy prices. Food prices eased as well as manufactured products and services,’ the EU statistics agency said.
According to the agency, eurozone core inflation was unchanged at 5.3 per cent in the year to August.
UK inflation cooled to 6.8 per cent in July, down from 7.9 per cent in June.
British Retail Consortium figures this week showed that UK shop price inflation fell to its lowest level in a year in August.
And Bank of England chief economist Huw Pill said yesterday that the central bank will ‘see the job through’ to bring inflation back down to its 2 per cent target, even if there was a risk of raising interest rates too high.
‘The key element is that we on the Monetary Policy Committee need to see the job through and ensure a lasting and sustainable return of inflation to 2 per cent,’ he told a conference organised by the South African central bank.
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