French Inflation Rises On Energy Prices; GDP Growth Confirmed

France’s inflation accelerated in August, driven by energy prices, after slowing for three straight months, official data showed on Thursday.

Consumer price inflation rose to a three-month high of 4.8 percent in August from 4.3 percent in July, the statistical office INSEE reported. The rate was also above economists’ forecast of 4.6 percent.

The increase was driven by the 6.8 percent rebound in energy prices. Meanwhile, food price inflation slowed for the fifth straight month in August, to 11.1 percent from 12.7 percent.

Compared to the previous month, consumer prices gained 1.0 percent after a 0.1 percent rise in July.

The EU measure of inflation also accelerated in August, to 5.7 percent from 5.1 percent a month ago. The rate was forecast to increase to 5.4 percent.

Month-on-month, the harmonized index of consumer prices, or HICP, posted a 1.1 percent rise after remaining stable in July. Economists had expected a 0.9 percent gain.

The statistical office confirmed that the second largest euro area economy grew 0.5 percent sequentially in the second quarter after logging nil growth a quarter ago.

Due to a fall in food consumption, household spending was down 0.5 percent in the second quarter. In addition, gross fixed capital formation slid 0.1 percent. Government spending posted an increase of 0.4 percent.

Exports rebounded 2.7 percent due to higher demand for manufactured products. At the same time, imports gained 1.6 percent on higher energy imports. As a result, foreign trade contributed 0.3 points to GDP growth.

Finally, the contribution of inventory changes to GDP growth was 0.4 points versus a negative contribution of 0.3 points a quarter ago.

Separate data from INSEE showed that household spending growth slowed in July on falling energy and food consumption. Household consumption rose 0.3 percent after a 0.9 percent gain.

Industrial producer price inflation in the home market decelerated to 0.9 percent in July from 3.1 percent in June, the statistical office reported. On month, producer prices fell for the fourth straight month, down 0.2 percent after a 1.1 percent decrease a month ago.

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