French Inflation Rises to Highest Level in Over Two Years, Increasing Pressure on ECB Rate Hikes

Jin10 Data, September 30 – French inflation has accelerated to the fastest pace in over two years, putting greater pressure on the European Central Bank to continue raising interest rates. Data released on Wednesday by France's National Institute of Statistics and Economic Studies showed that as the second-largest economy in the Eurozone, France's inflation rate in September rose to 3.4%, higher than August's 2.6% and exceeding economists' forecast of 3.2%. The French data indicates that current inflationary pressure is still primarily driven by energy costs. Energy prices in September rose 21.2% year-on-year, aligning with the previous views of ECB officials that the shock from the Middle East conflict has not yet triggered significant second-round inflation effects. However, inflation in France's service sector has accelerated, rising to 2.2% in September from the previous 1.9%. Food inflation also increased from 1.1% to 1.5%, mainly driven by higher prices for fresh agricultural products.