France September final CPI +3.1% vs +3.0% y/y prelim
Prior +2.4%
France September final HICP +3.4% vs +3.4% y/y prelim
Prior +2.6%
France September core CPI +1.5% y/y
Prior +1.1%
The final figures for September are out and they’re not exactly offering much comfort for the ECB. The annual readings confirm another notable jump in price pressures, adding to the inflation concerns we’ve been seeing across the euro area lately.
Energy prices remain the biggest culprit, surging 21.3% annually in September compared with 16.7% in August. Once again, that is largely triggered by the ongoing fallout from the Middle East conflict.
That being said, we’re also starting to see broader price pressures creeping in elsewhere. Core annual inflation picked up to 1.5% from 1.1% previously, helped by a notable jump in services inflation – which rose to 2.4% from 1.9% previously. While core prices are still keeping below the 2% threshold for now, the direction of travel isn’t exactly what policymakers would like to see.
For now, the ECB could still be afforded some room to be patient after having already raised interest rates twice this summer. The question now is whether the recent inflation surge warrants another move sooner rather than later. So, the central bank definitely cannot afford to be complacent either.
If higher energy prices start feeding more evidently into services and wages, then the case for another rate hike in December will only grow stronger.
This article was written by Justin Low at investinglive.com.
