France’s inflation dropped to 4.3% in July, the lowest level since February last year, while the UK economy has avoided stagnation, growing 0.2% between April and June.
Two of Europe’s biggest economies received good news on Friday, with inflation dropping to the lowest level since February 2022 in July in France, and the UK avoiding stagnation after reporting a modest growth of 0.2% between April and June.
Consumer price inflation in France slowed down to 4.3% last month from 4.5% in June, with energy prices falling by 3.7% year-on-year. Food prices, on the other end, were still 12.7% higher in July 2023 than a year before – though they were down compared to the 13.7% year-on-year recorded in June.
The price of transport also rose by 5.4% in the last 12 months, while communication services are now 6.1% cheaper compared to last year. The category “rents, water and household waste collection” has increased by 3.1% over the past year. The price of tobacco rose by 9.8% year-on-year.
Core inflation, which excludes prices subject to state intervention and products with highly volatile prices, fell from 5.7% in June to 5.0% in July year-on-year.
Despite the slowdown, inflation in France remains well above the European Central Bank’s ideal target of close to, but below 2%.
The UK, which has been battling with inflation higher than most of Western Europe at 7.9% in the 12 months to June 2023, has avoided officially entering what’s known as stagnation – a prolonged period of little or no growth.
The country’s economy’s recent growth, 0.2% in the second quarter of the year, is better than experts expected, and better than in the first three months of the year.
“The manufacturing sector had a particularly strong month,” especially in the automotive and pharmaceutical sectors, noted Darren Morgan, the director of economic data for the Office for National Statistics (ONS).
The hot weather in June also helped the construction, accommodation, and food sectors.
“The measures we are taking to fight inflation are starting to pay off,” Finance Minister Jeremy Hunt said, adding that “the Bank of England now expects us to avoid a recession.”
Inflation-wise, the UK remains the worst off among all G7 countries.
Source: Euro News
