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.