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French producer prices fall at record pace on oil

Published 12/22/2008, 03:16 AM
Updated 12/22/2008, 03:20 AM

PARIS, Dec 22 (Reuters) - French producer prices fell at their fastest pace in more than nine years in November as oil prices continued to slide from their summer peak.

Data from national statistics office INSEE on Monday showed France's producer price index dropped 1.9 percent in November compared with October, a much bigger fall than the 0.9 percent predicted by analysts in a Reuters poll.

"It is the sharpest decline since the index was first published for industry as a whole," INSEE said in the monthly data release. The series began in January 1999.

Year-on-year, producer prices rose 1.6 percent in November.

Energy prices were the main driver behind the month-on-month fall, INSEE said. The energy component of the index fell 7.1 percent in November, the sharpest drop of any category.

Oil prices had collapsed to around $54 a barrel by the end of November from July's record high of over $147. Oil has continued to fall since then and was at less than $43 a barrel on Monday.

Semi-finished goods prices fell 1.3 percent, while prices in the agri-food sector dropped 0.6 percent. Capital goods and consumer goods both posted a fall of 0.1 percent.

The only component in which prises rose in November was automobile goods, which posted an increase of 0.6 percent.

Tumbling inflation has given the European Central Bank room to cut interest rates in the face of global economic downturn. The ECB cut its main refinancing rate by a record 75 basis points to 2.50 percent on Dec. 4 and is expected to cut again in the new year. (Reporting by Francois Murphy, editing by Mike Peacock)

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