French inflation creeps up in June

PARIS - Annual inflation in France crept up to 1.2 percent in June from 1.1 percent in May, official figures showed Friday, with analysts forecasting continued price stability for all of 2007.

By (AFP)

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Published: Fri 13 Jul 2007, 4:40 PM

Last updated: Sat 4 Apr 2015, 10:20 PM

Consumer prices on a monthly basis rose 0.1 percent in June from May, reflecting increases in the energy, fresh food and services sector, the national statistics institute INSEE reported.

It said energy prices rose 0.5 percent in June from May but were down 0.3 percent when compared with June 2006.

‘Inflation will remain moderate throughout 2007, even if there is a little spike near the end of the year,’ predicted Alexander Law of the economic research group Xerfi, attributing the expected trend to the strong euro, which lowers the price of imported goods.

‘The strong euro constitutes an extremely solid bulwark against inflation ... and helps spare us a much steeper energy bill, since the price of a barrel of oil is denominated in dollars,’ he said.

At financial consultants ACDE, analyst Marc Touati said that ‘given fragile demand and the pressure on prices exerted by increased competition, inflation in France is structurally weak.’

‘Whatever happens to oil prices and the euro, inflation is not likely to exceed 2.0 percent. For all of 2007 French inflation should come to 1.4 percent after 1.7 percent in 2006 and 2005.’

Elsewhere in the eurozone, annual Italian inflation came to 1.7 percent in June after 1.5 percent in May and April, the statistics body Istat reported Friday.

Prices gained 0.2 percent in June compared with May, when they rose 0.3 percent from April.

In Finland inflation was at 2.4 percent in June on an annual basis, the national statistics office said.

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