The INSEE statistics organization announced on Tuesday that France’s annual inflation rate unexpectedly rose to 7.2% in February, a slight upsurge from 7.0% in January, mainly caused by rising food prices.
Preliminary inflation data for February exceeded Reuters’ predictions, which called for a reading of 7.0%. Finance Minister Bruno Le Maire has been meeting with French food retailers to discuss strategies for assisting consumers in coping with excessive food price inflation. Le Maire has stated that he anticipates inflation to peak this summer and then begin to decline.
According to industry figures released on Tuesday, British grocery inflation reached 17.1% in the four weeks leading up to February 19 as a result of interruptions to food supply channels brought on by the conflict in Ukraine.
In remarks to Reuters on Tuesday, Philip Lane, the head economist of the European Central Bank (ECB), asserted that even though inflationary pressures in the euro zone have weakened, the bank will go on to lift interest levels until it can be absolutely sure of a resurgence in price growth to the two percent mark.
The ECB should raise rates to 3% in March, increasing to near 4% by 2023. This will be another 50-basis point hike.
Spain’s inflation: It might decline soon
According to ING economist Wouter Thierie, Spain’s inflation rate is predicted to reduce in the upcoming months as a result of decreasing energy prices. However, the decline should be gradual because underlying price pressures are still quite strong. According to him, core inflation, which does not include the more volatile categories of food and energy, is still rising and firms’ selling price expectations are still high.
The solid economy in the eurozone also makes it simpler for businesses to execute price rises, which adds to the core inflation rate’s persistence, according to Thierie. The average rate of inflation in Spain will be 4.3% in 2021, dropping to 2.7% over the next two years. The Dutch bank predicts that inflation won’t return to 2% until the second half of 2024.
On Tuesday, the National Statistics Institute (INE) announced early data which revealed that in February, consumer prices in Spain resumed their previous upward trajectory, being 6.1% greater than the same time the prior year, a quicker increase than the 5.9% from a 12-month period before January, and higher than the predictions of 5.7%, made by analysts interviewed by Reuters.
Spain’s inflation has now increased for two straight months in yearly terms after the country managed price increases in the second half of 2022, recording the lowest figure in the euro zone by the end of the year.
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