INFLATION in France has reached 0.3 per cent, signalling a wider recovery in prices across the Eurozone.
French inflation reached a recent trough of minus 0.4 per cent in January, but has recovered in line with the rest the currency bloc to eventually escape deflation. Yet the inflation breakdown shows that the return to price growth was led by rebounding food and energy prices.
There is not much evidence to suggest that return to inflation is a result of the European Central Bank’s asset purchase programme, launched in March.
Many economists expect inflation in France and the rest of the Eurozone rise following a sharp increase in the growth rate of the money supply. The M3 measure, which counts the euros in the bank accounts of households and companies, hit 5.3 per cent annual growth in April. The asset purchase programme is expected to lift it further.