France Inflation Strongest Since 2008

France inflation accelerated to the highest level since 2008 driven by surging energy prices, the provisional estimate from the statistical office Insee showed on Tuesday.

In a separate communiqué, the statistical office also confirmed the sequential growth for the third quarter.

Consumer price inflation advanced to 2.8 percent in November from 2.6 percent in October. The rate was expected to remain unchanged at 2.6 percent.

The latest inflation was the strongest since September 2008, when prices were up 3 percent.

The annual increase was driven by the acceleration in energy prices, manufactured goods prices and services cost.

French inflation will continue to rise in the coming months due to energy prices, production line constraints that continue to push up producer prices, Charlotte de Montpellier, an economist at ING said.

Month-on-month, consumer prices moved up 0.4 percent, the same rate as seen in October. The rate was forecast to ease to 0.2 percent.

Inflation, based on the harmonized index of consumer prices, climbed to 3.4 percent from 3.2 percent a month ago. Economists had forecast the HICP to gain 3.2 percent again in November.

On a monthly basis, the HICP grew 0.4 percent, the same rate as in October. Final data is due on December 15.

Another report from Insee showed that producer price inflation advanced to 14.9 percent in October from 11.7 percent in September. Compared to September, producer prices gained 2.9 percent after rising 1.7 percent.

Revised data from Insee showed that the GDP growth estimate for the third quarter improved notably to 3.0 percent from +1.3 percent in the second quarter. The growth rate remained unchanged from the first estimate published back in late October.

In October, household consumption decreased unexpectedly by 0.4 percent and remained below its pre-crisis level.

This decline was mainly due to a sharp drop of 1.8 percent in consumption of manufactured goods. It was partially offset by the 0.7 percent rise in consumption of food and 1 percent increase in spending on energy.

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