France records highest inflation rate for decades

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Soaring food and energy costs have propelled consumer prices upwards

Consumer prices in France have been growing at their highest rate in over three decades, Reuters reported on Thursday, citing data from state statistics agency INSEE.

According to the report, EU-harmonized preliminary inflation in the country increased by 0.8% in June from the month prior, driving annual inflation to 6.5%, its highest level since 1991. The figures marked the second month in a row in which inflation has reached record highs since France began using the EU’s calculation methods in the early 1990s.

Meanwhile, the country’s national consumer price index was somewhat lower, but still up at 5.8% year-on-year from 5.2% in May.

INSEE specified that inflation is mostly being driven by increasing energy prices (up 33.1% year-on-year and 5.3% month-on-month) and food prices (up 5.7% year-on-year and 1.4% month-on-month). However, prices in other spheres have somewhat stabilized, the agency says, with services inflation remaining at 3.2% since May, while manufactured goods inflation is down compared to last month, standing at 2.6% against 3.0% in May.

The statistics agency still expects inflation to continue to rise in the third quarter of the current year, however, before gradually declining in the fourth quarter and into 2023.

READ MORE: Eurozone recession warning issued

French President Emmanuel Macron recently vowed to take steps to rein in high inflation, including tax cuts and pension hikes. But analysts say his plans may fail since his party did not win an absolute majority in parliament earlier this month.

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