Inflation in France has decreased to its lowest level in 7 months.

Inflation in France is Declining

In France, inflation has decreased to its lowest level in 7 months, indicating that consumer prices have only increased by 0.7% on a yearly basis. This increase rate shows a significant decline compared to the 0.8% level in the previous month of November.

Significant Decrease in Energy Costs

According to data published by the French Statistics Office, the figures for December reveal a sharper decline in energy costs. However, inflation in the service sector has remained stable at 2.2%.

Comparative Situation in Europe

Price increases in France have been below 2% for over a year. This situation presents a more favorable picture when compared to other European countries. The Euro Area inflation, expected to be announced on Wednesday, is said to be in line with the targets set by the European Central Bank (ECB) for December.

ECB's Policy Rates

The European Central Bank has not made any changes to the policy rate since June of last year. Due to inflation maintaining a close range to the target in the last meeting of 2025, they did not change the rates. Most analysts agree that the easing cycle has come to an end.

View of the French Central Bank

The President of the French Central Bank, François Villeroy de Galhau, is one of the key officials who has stated that the ECB should not ignore future policy changes. Villeroy expressed that the risks to inflation are 'particularly downward,' emphasizing that his colleagues should have full 'options' regarding future steps.