27 May | Euro

French inflation falls to lowest level since 2020

French inflation falls to lowest level since 2020

Inflation in France has eased to its weakest level in over four years, slipping below the European Central Bank's 2% target. According to Bloomberg, this slowdown in price growth strengthens the arguments for further interest rate reductions by the financial regulator.

In May, consumer prices in France rose by 0.6% year-on-year, the weakest increase since December 2020. This figure was below analysts' forecasts and the April data, driven by an 8.1% decline in energy costs. Meanwhile, service sector inflation, widely watched as a measure of underlying domestic price trends, fell to 2.1% from 2.4%.

The development aligns with the continuing moderation of price pressures across the euro area. Experts expect May data for Germany, Italy, and Spain to show a similar decline. At the same time, ECB officials are trying to assess the current economic uncertainty caused by US tariff policies.

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