According to provisional data, French consumer prices were unchanged in November compared with market expectations of a 0.1% decline for the month. The year-on-year increase increased to 0.5% from 0.4%.
The annual increase in food prices increased to 0.3% from a reading of -0.1% the previous month with a sharp increase in the prices for fresh foods.
There was also an annual increase of 2.1% for energy prices from 0.7% the previous month and compared with a 6.0% decline in the year to November 2015.
In contrast, manufacturing prices declined 0.6% over the year, unchanged from the previous month and the annual rate of increase in services-sector prices was held at 1.0% with a monthly downturn in prices. The manufactured goods rate is the same as in November 2015 with the services rate declining from 1.2% last year.
The small increase in inflation will ease concerns over very low inflation to some extent, although the main gain came from food and energy prices and there will be further concerns surrounding sustained weakness in core inflation levels.
There will need to be a sustained increase in inflation over a period of several months and stronger pricing evidence in the PMI data to ease underlying concerns.
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