Bloomberg News

French Inflation Holds at Three-Year High in December

January 12, 2012

(Corrects to remove reference to taxes in first paragraph.)

Jan. 12 (Bloomberg) -- France’s inflation rate held at a three-year high in December as President Nicolas Sarkozy’s government cleared increases in gas and electricity prices.

Consumer prices rose 2.7 percent from a year earlier based on European Union methodology, matching the rate in November, national statistics office Insee said today. The November reading was the highest since October 2008. Economists had forecast a 2.5 percent increase, according to the median of 12 estimates gathered by Bloomberg.

London crude-oil prices have dropped 29 percent since the middle of last year, helping ease inflationary pressures on some products. The increases in natural-gas prices and higher sales taxes may keep inflation robust through much of 2012.

“Inflation will remain high in France for most of the year,” said Michel Martinez, an economist at Societe Generale in Paris. “With the cost of gas, electricity and public transport rising, disinflation will take time to appear.”

In the month, prices rose 0.4 percent.

--Editor: Jennifer M. Freedman, Vidya Root

To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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