French Inflation Rises Above Estimates in June - INSEE

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French Inflation Rises Above Estimates in June - INSEE
Credit: © Reuters.

By Scott Kanowsky -- Consumer prices in France rose by more than expected in June, according to preliminary EU-harmonized data on Thursday, putting further pressure on French President Emmanuel Macron to tackle soaring inflation.

France's INSEE statistics agency said its monthly consumer price index - a key measure of inflation in the country - jumped to 5.8% year-on-year from a revised reading of 5.2% in May. Analysts had expected CPI to come in at 5.7%.

INSEE added that the uptick - which matches a record high touched in May's preliminary CPI numbers - was driven by increasing costs for energy and food.

The EU-harmonized figure climbed to 6.5%, ahead of forecasts of 6.3%.

On a monthly basis, consumer prices moved higher by 0.7%, in line with estimates and even with the same reading in May.

French President Emmanuel Macron has vowed to address high inflation through a package of measures, including tax cuts and pension hikes. However, Macron's ability to enact more changes to bring down prices may now be hampered after his party failed to win an absolute majority in parliament in elections earlier this month.

Meanwhile, the latest inflation data from France comes as the European Central Bank debates its short-term monetary policy. The central bank looks set to raise interest rates for the first time since 2011 in July, with ECB President Christine Lagarde warning this week that prices across the eurozone are "undesirably high". The ECB has also suggested it will hike borrowing costs further in September, but the exact size of that move remains uncertain.

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