Economic Report: French and Italian inflation surprise to the upside as major European economies grow in the third quarter
French inflation surprised to the upside in October, data released on Friday showed, showing the difficulty central banks have in containing runaway prices.
The preliminary release of the French harmonized index of consumer prices shows it grew 0.9 percentage points to 7.1% year-over-year in September, well ahead of consensus expectations for 6.5% growth.
Energy costs were up 19.2% year-over-year, food prices increased by 11.8% year-over-year, while non-energy industrial goods costs rose 4.2%.
France has seen fuel shortages after strikes. And the country’s fuel rebates will decrease in November and December, which may lift inflation further at the end of the year, ING economists said.
In Germany’s largest state, North Rhine-Whestphalia, CPI shot up to 11% from 10.1%. In Spain, however, inflation fell to 7.3% from 9%, helped by a drop in natural-gas prices.
The European Central Bank on Thursday made its second consecutive thiree-quarter point rate hike and said it would increase rates further.
Meanwhile, Germany, France and Spain each reported third-quarter GDP figures, with Germany growing 0.3% quarter-on-quarter, while France and Spain each grew by 0.2%.