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French Inflation Holds Near Three-Year High

France’s inflation rate held near a three-year high in January as President Nicolas Sarkozy’s government increased sales tax rates on some goods and services and energy prices climbed.

Consumer prices rose 2.6 percent from a year earlier based on European Union methodology, compared with increases of 2.7 percent in November and December, national statistics office Insee said today. The November increase was the highest since Oct. 2008. Economists had forecast a 2.7 percent gain, according to the median of 17 estimates gathered by Bloomberg.

With London crude-oil prices up 13 percent in a year and the government seeking to raise revenue through sales tax increases, prices will probably continue to rise in Europe’s second-largest economy for much of 2012, economists said.

“Inflation isn’t set to fall back, though the share of energy costs in the increases should decline,” said Dominique Barbet, an economist at BNP Paribas in Paris.

In the month, prices fell 0.4 percent, helped by France’s semi-annual sales period.

To contact the reporter on this story: Mark Deen in Paris at

To contact the editor responsible for this story: Craig Stirling at

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