EUROPEAN INFLATION: Energy Drives Upward Revision To French June Inflation

French final June HICP was a tenth above the flash release on a rounded basis, but actually was only revised 4 hundredths higher to 0.86% Y/Y (vs 0.82% flash, 0.59% prior). Still, it’s worth remembering that the initial consensus ahead of the flash release was 0.7% Y/Y, so it’s a decent upward surprise all told. Energy drove the upward revision versus the flash release.

• Headline CPI was also revised a touch higher to 0.97% Y/Y (vs 0.93% flash, 0.66% prior).
• On a seasonally adjusted basis using INSEE data, CPI rose 0.39% M/M, above May’s -0.05% and April’s 0.32%. 3m/3m SA CPI growth rose 0.55% (VS -0.66% prior), though it’s too early to suggest the broader downtrend that began in late 2022 has ended.
• Core inflation (excluding energy and unprocessed foods) ticked up to 1.2% Y/Y (vs 1.1% prior).
• Looking at the CPI components:
  • Services was confirmed at 2.4% Y/Y (rounded, vs 2.09% unrounded prior). Unsurprising drivers were cited in the press release (Easter timing related unwinds): Airfares rose 4.6% Y/Y (vs 0.7% prior) and accommodation services rose 5.5% Y/Y (vs 1.6% prior). However, there were some signs of broader underlying services disinflation still playing out, with insurance inflation at 9.5% Y/Y (vs 10.2% prior) and maintenance/repair of vehicles at 3.2% Y/Y (vs 3.4% prior).
  • Non-energy industrial goods was confirmed at -0.2% Y/Y (vs -0.19% prior).
  • Food inflation was confirmed at 1.4% Y/Y (vs 1.31% prior).
  • Energy inflation was revised up to -6.7% Y/Y (vs -6.93% flash, -8.01% prior) – seemingly the driver of the upward revision to headline inflation.