France confirms inflation rate steady at 1%

France’s annual inflation rate stood at 1% in July 2025, unchanged from June and fully in line with preliminary estimates, keeping headline price growth near its lowest levels since late 2021.

A marginal acceleration in services inflation (2.5% vs. 2.4% in June) and food prices (1.6% vs. 1.4%) was offset by a sharper drop in energy costs, which fell 7.2% year-on-year compared with a 6.7% decline in June. Manufactured product prices fell at the same rate as the previous month (-0.2%), reflecting persistent softness in consumer goods pricing amid ongoing discounting.

On a month-over-month basis, consumer prices increased by 0.2% in July, following a stronger 0.4% rise in June, also consistent with flash estimates. The monthly uptick was driven primarily by seasonal increases in service charges — notably in transport and accommodation — as the summer holiday season gathered pace.

Energy prices also rose slightly compared to June, partly reversing earlier declines. However, the impact was tempered by deeper price cuts in manufactured goods due to summer sales, which provided some relief to consumers. Food and tobacco prices were broadly stable compared with the previous month.

The annual harmonized index of consumer prices (HICP) — the measure used for euro area comparisons — remained at 0.9% in July, unchanged from June, while the monthly HICP rose 0.3%, easing slightly from 0.4% in the prior month. Both figures confirmed earlier flash readings, underscoring the relatively subdued price environment in France compared with the euro area average.

The data highlight France’s relatively contained inflation profile, especially compared to some of its eurozone peers where headline rates remain closer to the European Central Bank’s 2% target. The sharp and sustained drop in energy prices has played a key role in keeping headline inflation low, while core components such as services and food are seeing only modest upward pressure.

With consumer spending showing signs of resilience but business investment remaining cautious, the low inflation backdrop could give policymakers scope to maintain supportive fiscal measures without adding to price pressures.