German and French consumer price inflation seems to have continued rising in October

Germany’s consumer price inflation is expected to have continued rising is October after rising by three ticks to 0.7 percent year-on-year in the prior month. HICP inflation had risen two ticks to 0.5 percent year-on-year. According to a Societe Generale research note, Germany’s CPI inflation is likely to jump two ticks higher in October to 0.9 percent year-on-year, while the HICP is expected to have risen to 0.8 percent.

Energy prices, led by the base effects and monthly rise in Brent prices, are expected to have been the main driver of inflation in Germany. However, food is also expected to have contributed to the headline figure. Meanwhile, core inflation is likely to have remained stable in October as both non-energy industrial goods and services prices are expected to have stayed stable.

“Looking ahead, we expect German HICP inflation to continue recovering at a faster pace, rising above 1.0 percent by year-end”, noted Societe Generale.

Similarly, France’s consumer price inflation is also expected to have continued improving in October and is likely to have reached a two-year high of 0.5 percent year-on-year. The HICP inflation is expected to have increased by two ticks to 0.7 percent year-on-year.

This rebound is possibly due to the energy component, which is anticipated to have turned positive in annual terms for the first time since July 2014, owing to the higher gasoline prices. Core goods, food and services prices are also expected to have stayed stable in October.

“Looking ahead, inflation in France is likely to continue recovering at a fast pace, climbing above 1.0 percent by year-end and primarily being led by energy base effects”, added Societe Generale.