France: inflation dropped surprisingly in March

O in retreated to the lowest level in the last three years in March. As a result of reducing inflation in the low three-year period in France, calls on the ECB to reduce interest rates quickly. The unexpected sharp fall in inflation in France strengthens supporters of an impending reduction in interest rates by the European Central Bank (ECB). Consumer prices increased by only 2.4% in March compared to the same month last year, according to the Insee statistical service on Friday. This is the lowest percentage since August 2021. In February, inflation calculated according to single European standards was still 3.2%. Economists involved in a Reuters news agency survey expected it would only be reduced to 2.8%. While fresh food became cheaper, energy prices in the second largest economy of monetary union after Germany did not increase as much as before. According to France’s head of central bank, François Villeroy de Galhau, the ECB will probably launch a turn in the spring with a moderate decrease in interest rates. This will happen regardless of how the US Federal Bank’s monetary policy programme will be formulated, the ECB Council member said in a speech at Paris-Dauphine University yesterday (28.3.24).