France, the eurozone's second-largest economy, witnessed a noticeable acceleration in inflation in December, according to the latest official statistics released on Thursday. The data, which reflects a persistent challenge in managing food prices, comes as a concern for both policymakers and consumers.
The statistics authority Insee reported a year-on-year price increase of 3.7 percent in December, a slight rise from November's 3.5 percent. The increase was primarily driven by higher costs in energy and services. However, there was a slowdown in price growth for manufactured goods and key food items, which are critical components of the consumer basket.
Despite the general slowdown, food inflation remained significant at 7.1 percent last month, compelling many consumers to opt for more affordable alternatives or seek out special offers in supermarkets. This high rate of food inflation has prompted a proactive response from the government in Paris, which has advanced the annual negotiations between food producers and retailers. The goal is to expedite the reduction of food input costs and pass these savings directly to consumers.
Michel-Edouard Leclerc, the chief of the E.Leclerc supermarket chain, emphasized this strategy in a statement to France 2 broadcaster on Tuesday. "We're going to be looking for areas to bring prices down, we're going to kick inflation in the teeth," he declared, signaling a robust approach to tackling high food prices.
The Harmonised Index of Consumer Prices, the European Central Bank's (ECB) preferred measure, also showed an increase in French inflation. It rose from 3.9 percent year-on-year in November to 4.1 percent in December. This uptick comes amidst broader efforts by major central banks, including the ECB, to manage inflation. The Frankfurt-based bank has raised its benchmark deposit rate to an unprecedented four percent, aiming to control price growth across the 20-member eurozone. This move reflects a determined stance to mitigate inflationary pressures in the region.
