French headline inflation decelerates in October on downturn in energy prices

French headline inflation decelerated in the month of October. On a year-on-year basis, the consumer price inflation eased to 0.7 percent from September’s 0.9 percent, according to the provisional estimate by INSEE.

The slowdown in inflation is due to a downturn in energy prices and because of a deceleration in those of food. Manufactured goods prices are likely to have dropped less than in September and the inflation in services should be unchanged.

Sequentially, consumer prices edged down by 0.1 percent, after a 0.3 percent fall in September. Energy prices should be stable on a sequential basis, the rise in petroleum product prices being countered by an accentuated fall in gas prices. Services inflation dropped barely after a sharp contraction in September. Food prices dropped at the same pace as in the previous month and those of manufactured goods decelerated.

On a year-on-year basis, the Harmonised Index of Consumer Prices decelerated to 0.9 percent after 1.1 percent in the prior month. Sequentially, it fell 0.1 percent.