France’s inflation accelerated to its highest level in almost three years in October, final figures showed on Friday, driven by a sharp rise in energy prices that is squeezing households and complicating the European Central Bank’s path.
Consumer prices rose 3.7% year on year on the EU-harmonised measure, statistics office INSEE said, revised down slightly from a preliminary reading of 3.8%. The rate was up from 3.4% in September and was the highest since December 2023. On the national measure, inflation stood at 3.4%, unchanged from the preliminary estimate.
Energy was the main driver. Energy prices climbed 1.9% in a single month and were 24.1% higher than a year earlier — the fourth consecutive month in which the annual rate has accelerated, after 16.7% in August and 21.3% in September. INSEE attributed the rise to gas and oil products.
Underlying pressures are also building. Core inflation, which strips out volatile energy and food prices, rose to 1.7% from 1.5% in September, while services inflation — the largest part of the French basket — picked up to 2.6%, from 2.4% in September and 1.9% in August, pushed up by hotel and transport prices.
The figures land alongside a weak growth picture. France’s economy unexpectedly shrank 0.1% in the third quarter, against forecasts of 0.1% growth, and Economy Minister Roland Lescure has described the combination of shocks hitting the country as unprecedented. Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics, said “France faces stagflation” and expects harmonised inflation to rise above 4% by November.
The persistence of price pressures is likely to keep alive market bets that the European Central Bank will lean towards higher interest rates rather than cuts, even as growth stalls — a difficult backdrop for the euro zone’s second-biggest economy, where energy costs pushed higher in part by the US-Israeli war on Iran continue to feed through.
Sources: Reuters, “French inflation rises to 3.7% in October, highest since December 2023” (https://www.reuters.com/markets/us/french-inflation-rises-37-october-highest-since-december-2023-2026-11-13/); INSEE final October consumer price data; Pantheon Macroeconomics.
