France’s EU-harmonized consumer price inflation rose to 2.7% year-on-year in August from 2.4% in July, according to provisional data from INSEE (France’s national statistics office). The increase matched the flash estimate published on August 30 and was driven mainly by faster price growth in services and manufactured goods. Energy prices continued to decline, but more slowly than in July, while food prices were relatively stable. The harmonized index, or HICP (standardized EU inflation measure), is designed to make inflation comparable across member states. France’s rate exceeded the eurozone’s 2.2% average and remained above the ECB’s 2% target. Economists said the rise could support a cautious approach to further rate cuts as the ECB weighs weak growth in some member states against persistent price pressures. The ECB has reduced its deposit rate twice this year and has said incoming data will guide subsequent decisions. For French households, faster inflation means living costs continue to rise more quickly than wages in many sectors. Service prices, including restaurant meals, hairdressing and transport, are particularly sensitive to wage growth, while their recent increases indicate resilient domestic demand. Inflation remains well below the peaks of 2022 and 2023, when energy prices surged after the outbreak of war in Ukraine, and is below the 3% threshold many policymakers consider tolerable. The outlook remains uncertain, and policymakers are likely to maintain a wait-and-see approach in the coming months.