French Inflation Surprises On The Downside

French inflation slowed to 1.8% in June, falling short of consensus expectations due to lower energy and manufactured goods prices. While a modest rebound is projected for the remainder of 2026, the outlook remains muted due to weak domestic demand.

Key Takeaways

• 1.French inflation fell to 1.8% year-on-year in June, lower than expected, driven primarily by falling oil prices.
• 2.The June inflation figures serve as a dovish signal for the European Central Bank.
• 3.Inflation is expected to rebound in coming months due to minimum wage increases and energy cost pass-throughs, but remain limited.

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