French inflation stronger than expected in August at 3-year high

© Reuters. FILE PHOTO: Models present creations by German designer Karl Lagerfeld as part of his Fall/Winter 2014-2015 women’s ready-to-wear collection for French fashion house Chanel at the Grand Palais transformed into a “Chanel Shopping Center” during Paris Fashi

PARIS (Reuters) – French inflation accelerated more than expected in August at the fastest rate in nearly three years, a preliminary estimate from the INSEE official statistics agency showed on Tuesday.

INSEE said its index of EU-harmonised consumer prices rose 0.7% from July, giving a 12-month inflation rate of 2.4%, jumping from 1.5% in July to hit the highest since October 2018.

The surge exceeded expectations for a rate of 2.1% in a Reuters poll of 16 economists in which the highest forecast was 2.2%.

Inflation has jumped worldwide as economies recover after the coronavirus crisis, straining supply chains and creating shortages that are driving prices higher.

French central bank governor Francois Villeroy de Galhau said last week that although tight supply chains would push inflation higher in the short term, he continued to expect the increase to be temporary.

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