Summary of French CPI Report - July 2025
Overview
In June 2025, France's Consumer Price Index (CPI) showed an unexpected increase, rising to 1.0% year-on-year, surpassing the forecast of 0.9% and the previous figure of 0.7%. This uptick in inflation was primarily driven by a rebound in service and energy prices.
Key Data Points
- Year-on-Year CPI: Actual: 1.0%, Forecast: 0.9%, Previous: 0.7%
- Month-on-Month CPI: Actual: 0.4%, Forecast: 0.3%, Previous: -0.1%
- Harmonized Index of Consumer Prices (HICP):
- Year-on-Year: Actual: 0.9%, Forecast: 0.8%, Previous: 0.6%
- Month-on-Month: Actual: 0.4%, Forecast: 0.4%, Previous: -0.2%
Analysis
The increase in inflation can be attributed to strong seasonal demand in the services sector, particularly in accommodation and transport, which saw significant month-on-month increases of 8.4% and 3.7%, respectively. Additionally, energy prices rebounded by 0.6%, although the year-on-year decline in petroleum products was less severe. Food prices remained stable, and manufactured goods showed minimal change.
Core inflation also saw a slight increase, rising to 1.2%. This overall inflation uptick indicates a recovery in certain sectors while broader price pressures remain contained, suggesting that the economic environment is stabilizing.
Market Reaction
Following the release of the inflation data, the EUR/USD currency pair exhibited muted trading activity, remaining within a tight range after an initial dip below the 1.17 mark. This indicates that while the inflation data was higher than expected, it did not lead to significant volatility in the forex market.