French Inflation Holds Steady at 1.8% in November, Driven by Food, Energy

French inflation held steady in November, suggesting companies are struggling to pass on higher energy costs as the economy weakens.

Consumer prices, based on a harmonized European Union method, rose 1.8 percent from a year earlier, the Paris-based national statistics office Insee said today. That’s in line with the median estimate of 10 economists in a Bloomberg News survey. In the month, prices rose 0.1 percent.

Rising oil prices are leaving French consumers with less money to spend just as companies are seeking ways to cut costs. French industrial output unexpectedly fell in October and wage growth slowed in the third quarter. The European Commission said last month the French economy will expand at a weaker pace than the 16-member euro region this year.

“Inflation should reach its high for 2010 in December,” said Dominique Barbet, senior economist at BNP Paribas in Paris. Still, service prices will be “restrained by the moderation in wage growth,” he said.

Energy prices rose 0.9 percent from October and jumped 10 percent from a year earlier. Excluding food and energy costs, consumer prices rose 0.7 percent in the year and fell 0.1 percent from October, Insee said.

To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net

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