French inflation accelerates to 2.6% in July, but below forecasts

A view shows La Grande Epicerie de Paris, a three-story food hall, in the 16th district of Paris·Reuters
Reuters
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(Reuters) - French inflation sped up to 2.6% in July but was still below forecasts, as a surge in energy coasts was partially offset by slowing food and services prices, preliminary data from statistics agency INSEE showed on Wednesday.

The EU-harmonized inflation rate was 2.6% year-on-year in July, slightly below the average expectation of 2.7% in a Reuters poll of economists, but up from 2.5% in June.

The lower-than-expected rise could offer France's government some relief amid a political impasse, though inflation is still well above the European Central Bank target of 2%.

On Tuesday, preliminary GDP figures showed the economy growing marginally faster than expected.

Energy prices jumped 8.5% on the year in July versus a rise of 4.8% in June, INSEE said, pointing to gas prices in particular.

However, prices of food cooled to 0.5% in July, from an increase of 0.8% in June, while services inflation also slowed, to 2.5% from 2.9% in the previous month.

(Reporting by Olivier Sorgho; Editing by Andrew Heavens and Bernadette Baum)