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France's Inflation Weakest Since 2016

France's consumer price inflation slowed to its lowest since 2016 mainly reflecting falling energy prices, preliminary data from the statistical office Insee showed Tuesday.

Another report from Insee showed that household spending bounced back sharply in May but remained below its February level.

Consumer price inflation slowed to 0.1 percent in June from 0.4 percent in May. This was the lowest rate since May 2016, when prices remained flat annually.

The drop in inflation resulted from a slowdown in service and food prices and an accentuated fall in the prices of manufactured products.

Energy prices dropped at a slower pace of 9.3 percent after easing 11 percent in May. Food price inflation slowed to 2.3 percent from 3.5 percent.

Cost of services advanced 0.9 percent, slower than May's 1.2 percent rise. Meanwhile, manufactured product prices were down 1.1 percent.

On a monthly basis, consumer prices edged down by 0.1 percent in contrast to an increase of 0.1 percent in May.

EU harmonized inflation, based on the harmonized index of consumer prices, also slowed to 0.1 percent in June from 0.4 percent in May. This was also weakest since May 2016.

Month-on-month, the HICP slid 0.1 percent versus a +0.2 percent rise in May. Final data is due on July 16.

In May, producer prices in the French market dropped 0.1 percent on month, taking the annual fall to 4.1 percent. In the overall market, producer prices were down 0.2 percent from April and 3.5 percent from the same period last year.

Elsewhere, data showed that household spending decreased 7.2 percent in May compared to February as energy consumption and engineered goods spending fell 14.3 percent and 14 percent, respectively.

Meanwhile, food consumption grew 4.1 percent from February.

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