Surging energy prices fueling French inflation

On Friday, according to preliminary EU-harmonised data inflation in France, fuelled by surging energy prices touched a record high in France in April, applying fresh pressure on newly re-elected French President Emmanuel Macron.

In a statement, the INSEE statistics agency said, consumer prices rose by 0.5% in April, for a 12-month inflation rate of 5.4%, up from 5.1% in March. This is the highest rate of rise of inflation in France since Paris began using a European Union methodology to calculate the readings in the early 1990s.

Components fuelling inflation include a 26.6% year-on-year hike in energy prices along with rising prices for manufacturing goods and services.

The surge in inflation poses a challenge for Macron since it comes at a time when he is preparing for legislative elections next month. Macron won his second term earlier this month in a presidential ballot that was in largely in-part fought over voters’ concerns around high inflation eroding their purchasing power.

While Macron has, so far, managed to tame inflationary pressures below the euro zone average thanks to a 25 billion euro ($26.3 billion) package to help consumers cope with rising price pressures largely through caps on gas and power price increases, the going forward will be challenging.

($1 = 0.9523 euros)

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