In total, the rise in consumer prices stood at 4.9% over one year in September, stable rate compared to August, according to a first estimate published Friday by the National Institute of Statistics (INSEE).

Good news for households, food prices, which had been the main driver of inflation for several months, have eased.

They certainly continued to grow in September (+9.6%), but their rise slowed down sharply, whereas they had soared by 11.2% over one year in August.

The decline is particularly marked for fresh products, which rose 4.1% year-on-year in September after rising 9.4% in August.

The increase in services (+2.8% over one year in September) and in manufactured goods (+2.9%) was also slower.

"On the manufacturing side, there is the favorable effect of lower input prices, excluding oil," said Maxime Darmet, economist at Allianz Trade, interviewed by AFP.

Inflation in France © Sylvie HUSSON, Samuel BARBOSA / AFP

Energy prices, which had fuelled the inflationary shock after the invasion of Ukraine, before calming down, have risen sharply.

They climbed 11.5% year-on-year, a rebound mainly due to higher oil prices that are reflected at the pump.

"To watch"

"The pace of disinflation will be slowed by fuel prices, but the fall in production prices indicates that the underlying trend of falling inflation is still present," said Sylvain Bersinger, economist at Asterès, in a note.

Energy prices represent less than 10% of the consumption basket taken into account by INSEE for the calculation of the consumer price index, where food accounts for about 16% and services (accommodation and transport in particular) more than half.

The pace of disinflation in France will be slowed by fuel © prices Valentine CHAPUIS / AFP/Archives

However, they are "to be closely monitored," said Maxime Darmet, economist at Allianz. "If energy continues to increase, companies could raise their prices again, in food for example, which is a very energy-intensive sector."

Claiming to make inflation its main "fight", the French government has decided to grant a new check of 100 euros for low-income workers using their vehicles.

But the executive also wants to involve companies, constrained by reduced budgetary room for manoeuvre at a time when it wants to reduce the heavy debt of the France.

The public debt of the France fell to 111.8% of gross domestic product (GDP) in the second quarter, against 112.5% in the previous quarter, remaining however above the symbolic threshold of 3,000 billion euros, according to INSEE.

Economy Minister Bruno Le Maire said Thursday he would ensure that food manufacturers' margins remain "reasonable", while a bill aims to advance their commercial negotiations with distributors to try to pass on the slowdown in prices more quickly in stores.

Economy Minister Bruno Le Maire on September 27, 2023 in Paris © Mehdi FEDOUACH / AFP

Under pressure, the fuel sector has committed to multiply "cost price" operations at the end of the year.

To curb inflation and bring it back to its target of 2% by 2025, the European Central Bank (ECB) has since July 2022 raised rates at an unprecedented pace, with a cumulative increase over the last 14 months of 4.50 percentage points.

But while inflation is starting to fall excluding energy, it continues to weigh on household consumption.

It fell by 0.5% in August over one month. The decline can be observed in food (-0.5%), energy (-0.6%) and manufactured goods (-0.5%).

"There is no engine that allows a significant and sustainable recovery in consumption. Households remain very cautious," says Maxime Darmet.

© 2023 AFP