French inflation rises to 7.0% in January on energy prices

French inflation rises to 7.0% in January on energy prices

PARIS (Reuters) – French inflation rose in January on higher energy prices after the government phased out some measures that had reined in increases, according to preliminary figures released on Tuesday.

Consumer prices rose 0.4% from December, pushing the 12-month inflation rate to 7.0% from 6.7% the previous month, European Union-harmonised data showed.

The inflation rate, which was in line with economists expectations, jumped on higher energy prices after the government phased out a subsidy for car fuel at the end of the year.

Meanwhile, regulated gas prices set by the government rose 15% at the start of the year, adding to further pressure on energy prices. Regulated power prices are also set to rise 15% in February.

Most economists expect inflation to resume a downward trend once those increases in energy prices subside. Finance Minister Bruno Le Maire has consistently said that he expects inflation in France to recede from the middle of 2023 onwards.

Separately, INSEE said France managed to eke out 0.1% growth in the final quarter of 2022 as falling energy imports and firm business investment offset a pullback in consumer spending.

(Reporting by Sudip Kar-Gupta and Leigh Thomas; Editing by Benoit Van Overstraeten and Jamie Freed)

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