French Inflation Unexpectedly Accelerates in June

(Bloomberg) -- French inflation unexpectedly accelerated in June, indicating price pressures in the euro area may be stronger than forecast.

The harmonized measure of consumer prices in the currency bloc’s second-largest economy rose 1.4% on year after a 1.1% increase in May, statistics agency Insee said. Economists had predicted the rate to stay stable.

Firming inflation in France indicates domestic demand remains strong even amid uncertainty over trade and manufacturing output. Consumer spending growth accelerated last month, according Insee, and household confidence has recovered from a slump during the Yellow Vest protests.

That provides some relief for the European Central Bank, which has signaled it may need to inject more stimulus as inflation remains below its target.

German inflation was stable in June, according to figures Thursday. Euro area inflation will be published later Friday.

To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Zoe Schneeweiss, Craig Stirling

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