French Inflation Dips Below 1%

In an unexpected turn of events, France's annual inflation rate plummeted to 0.8% in February, marking the first time it has fallen below 1% since February 2021. This preliminary report, released by INSEE, the country's statistical office, on Friday, indicates a significant decrease from January's 1.7% and defies analysts' expectations.

Factors Behind the Decline

The primary driver behind this decline was a 5.7% drop in energy prices compared to February 2024. Conversely, tobacco prices saw a 4.5% increase, and service prices rose by 2.1%. On a monthly basis, the inflation rate remained steady, with the Harmonized Index of Consumer Prices (HICP) maintaining a 0.9% year-on-year rate and showing no change month-on-month.