Tens of millions of French households are being hit onerous by the horrific price of dwelling disaster and hovering worth rises sweeping all through Europe and inflicting hardship on a number of the continent’s largest economies. However the scenario worsened in France with inflation leaping once more in July, as much as 6.1 p.c from 5.8 p.c in June, based on the Paris-based Nationwide Institute of Statistics and Financial Research (INSEE).
The French nationwide statistics workplace attributed this rise to “an acceleration within the costs of companies in reference to the summer season interval, meals and – to a lesser extent – manufactured items”.
On an annual foundation, meals costs skyrocketed by 6.7 p.c in comparison with 5.8 p.c a month earlier.
The costs of manufactured items are on the rise at 2.7 p.c over a yr towards 2.5 p.c beforehand, whereas costs for companies jumped from 3.3 p.c to three.9 p.c year-on-year.
However in a single optimistic signal, power worth fell “sharply” in July – now solely 28.7 p.c larger than a yr earlier in contrast with 33.1 p.c in June.
This drop has been attributed to “costs of petroleum merchandise”, which have been falling progressively in France all through this month.
Regardless of this, specialists have warned general on a regular basis costs will seemingly proceed to rise, at the least for the subsequent couple of months.
INSEE acknowledged in its most up-to-date financial report from the top of June that costs are anticipated to proceed rising till “just below seven p.c in September” on a year-on-year foundation.
Inflation is then anticipated to stabilise, falling barely to five.5 this yr in comparison with simply 1.6 p.c in 2021, based on the specialists.
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Nonetheless, inflation in France remains to be stays a lot decrease than a few of its neighbouring European Union international locations, based on the most recent figures from Eurostat.
Belgium has seen inflation surge to 10.5 p.c on an annual like-for-like foundation, with 10 p.c in Spain, 8.7 p.c in Austria, 8.5 p.c in Italy, and eight.2 p.c in Germany.
There’s additionally now specific concern for Germany – house to the EU’s largest financial system – which is bracing itself for a continual scarcity of fuel heading into the winter months amid fears Russia will utterly flip off provide by way of the Nord Stream 1 pipeline.
General, the Eurozone financial system grew a lot sooner than anticipated within the second quarter of this yr, however economists continued to warn of the potential for a light recession triggered by ever-higher inflation and provide chain issues within the second half of this yr.
Eurozone GDP rose by 0.7 p.c quarter-on-quarter within the April-June interval for a 4.0% year-on-year achieve – beating expectations of a 0.2 p.c quarterly and three.4 p.c annual achieve.
Inflation within the 19 international locations sharing the euro foreign money jumped to eight.9 p.c in July from 8.6 p.c a month earlier.
ING economist Bert Colijn warned Europeans to count on a “gentle recession beginning within the second half of the yr”.
He stated: “The acceleration in financial progress is especially as a consequence of reopening results and masks underlying weak point as a consequence of excessive inflation and manufacturing issues.
“From right here on, we count on GDP to proceed a downward development because the companies reopening rebound moderates, world demand softens and buying energy squeezes persist.
“We count on that to end in a light recession beginning within the second half of the yr.”
Extra reporting by Maria Ortega.