France's inflation rate rose by 1.8% in August compared to the same month last year, according to the National Institute of Statistics and Economic Studies, INSEE.
This marks the first time in three years that inflation has fallen below the symbolic threshold of 2%.
In July, inflation had been at 2.3% year-on-year, but the increase in the Consumer Price Index (CPI) slowed in August due to a significant drop in energy prices.
This is the first time since August 2021 that inflation has been below the European Central Bank’s target of 2%. The Bank responded on Thursday by reducing interest rates due to the lower price increases.
On a monthly basis, however, inflation was at 0.5% in August, up from 0.2% in July.
Core inflation, which excludes the most volatile products, was more dynamic. It reached 1.7% in August on a year-on-year basis, up from 1.5% in July.
The Harmonised Index of Consumer Prices (HICP), used as a reference at the European level, increased by 2.2% year-on-year, a sharp drop from July’s 2.7%.
