French core CPI inflation remains subdued in October
The cost of living in France increased last month, bolstered by higher fresh food prices, especially butter, amid slight signs of building price pressures, according to economists.
On a harmonised basis, headline consumer prices rose by 0.1% month-on-month and 1.2% year-on-year, INSEE said, confirming an earlier estimate.
Food prices rose by 0.4% on the month, pushing the year-on-year rate from 1.1% to 1.5%, while those for energy sped ahead by 1.0%, yet services prices dipped by 0.2% and those of tobacco were flat versus September.
Exerting upwards pressure on fresh food prices and those of related goods was the cost of butter, as the country's grocers refused to pay more despite strong global demand, which had veen resulted in instances of hoarding by consumers.
So-called core consumer price inflation was even more muted, with prices unchanged versus September and up by only 0.5% in comparison to the same month one year ago.
However, according to Claus Vistesen at Pantheon Macroeconomics: "Overall, underlying inflation pressures in the French economy are subdued, but we think they are rising, slightly. GDP growth has accelerated and wage growth has picked up marginally. We think the INSEE measure of core inflation will head towards 1% in the next six-to-12 months."