Inflation in France Remains Below Policymakers' Target

Forex - Inflation in France remains below policymakers' target. According to estimates aligned with the European Union released by the French statistics agency, consumer prices increased by 1.7% year-on-year in November. The annual inflation rate was 1.6% in October. Economists had expected an inflation rate of 1.7% for November.

Service prices continued to be the main driver of French inflation, rising by 2.5% year-on-year in November compared to 2.3% in October. Energy prices showed a decline on an annual basis, although they were lower than the previous month.

Eurozone inflation figures are expected to show that the entire currency union recorded inflation above the European Central Bank's (ECB) target of 2%. However, as the economy struggles to gain momentum, it is anticipated that the ECB will lower interest rates at its upcoming policy meeting next month.

Francois Villeroy de Galhau, the Governor of the Bank of France, stated in a speech in Paris that inflation remaining below the target poses a risk of hindering growth in the Eurozone.

French consumers have been spending less at the beginning of the final quarter of the year. This suggests that France may not be able to rely on private consumption to sustain growth, and may need to be prepared for a sharp slowdown or recession in the final month of the year.