Mar 15, 2023
France’s Record February Inflation Revised Higher as Food Soars
(Bloomberg) -- The record pace of French inflation in February was faster than initially thought, keeping up pressure on the government and the European Central Bank to combat price increases.
Consumer prices jumped 7.3% from a year ago, the strongest surge for France in the history of the euro area. Statistics agency Insee had initially reported a 7.2% increase.
While the revision is only small, policymakers are watching the trend extremely closely as they try to plot their next steps.
The ECB is set to deliver on its intention to raise rates 50 basis points on Thursday, but its subsequent moves are less certain, all the more so after the collapse of Silicon Valley Bank rattled international markets.
In France, inflation has become a big political challenge for President Emmanuel Macron, coinciding with him pushing a contentious overhaul of pensions. Last week, his government negotiated a deal with retailers to flatten margins on essential items as households struggle with fast increasing food prices.
Statistics agency Insee said in its report on Wednesday that food, services and manufactured goods were the main contributers to faster year-on-year price increases, while energy cost increases slowed. Its measure of underlying inflation — which is being closely watched by central bankers — reached 6.1% in February after 5.6% in January.
--With assistance from Ainhoa Goyeneche.
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