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French inflation edges up in Feb, led by energy

Published 03/12/2009, 04:44 AM
Updated 03/12/2009, 04:48 AM
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PARIS, March 12 (Reuters) - French inflation picked up in February, boosted by increases in the cost of energy, clothes and services, official data showed on Thursday.

On a European Union harmonised basis, the index of consumer prices rose 0.4 percent in February from the previous month, slightly exceeding analysts' forecast of a 0.3 percent rise, data from statistics office INSEE showed.

The rise followed a 0.4 percent fall in January. Compared with a year earlier, prices rose one percent in February.

A bounce in energy prices led the increase, rising 0.5 percent on the month despite a 7.2 percent fall on a quarterly basis, according to a breakdown of the non-harmonised French consumer price index.

"This shouldn't last. In the coming months inflation will be pulled lower by the large base effect in the energy sector, while the economic contraction and under-utilisation of capacity will increasingly weigh on underlining prices," said Frederique Cerisier at BNP Paribas.

"Inflation should be negative in France by the summer."

All other headline components of the index rose, with the exception of food prices, which were flat.

The cost of manufactured products rose 0.3 percent, driven by a 1.3 percent rise in clothing and shoes. Prices paid for services rose 0.5 percent, boosted by a 0.6 percent rise in transport and communications.

In separate data, fourth-quarter non-farm payrolls were revised downwards slightly to -0.7 percent from a previously reported -0.6 percent. (Reporting by Francois Murphy, editing by Mike Peacock)

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