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Inflation at 2.5% but meat up 4.4%

Statistics show rising cost of living and socialists attack plan for increase in VAT

SHOP prices have gone up by 2.5% over the past year according to figures from national statistics body Insee - but it also pointed out that the prices of consumables had risen 4.1% with meat prices jumping 4.4%.

The figures follow a survey by the Observatoire Annuel des Prix de Familles Rurales which showed that a shopping basket of 35 typical goods - including water, biscuits, fruit juice, dessert, jam, dairy products etc - had hit a "record level" of €137. The price had risen 4.1% over the past year compared to just 0.2% in 2010.

That survey also found that some fruit juice prices had risen by nearly a third. Name-brand fruit juice rose 19% while supermarket own-label brands rose 28% and prices for budget labels soared by 32%.

Drink prices in general rose 4% but the increased cost of teas, infusions and chocolate drinks was compensated for by a reduction in alcohol prices.

Personal hygiene and beauty product prices rose by 2.2%.

The Familles Rurales survey said its basket of name-brand products would cost €177, own-brand labels €130 and budget labels €98.

The news was immediately seized by the Parti Socialiste who attacked President Sarkozy's plan to introduce a TVA Sociale next month. This would mean extra VAT would be levied to help pay social charges and move the burden away from businesses.

François Hollande's spokesman said the move could push inflation up to 4.5% - when, at 2.5%, it was already the highest for three years. Najat Vallaud-Belkacem said Sarkozy was "adding a price rise on top of rising prices".

However, the new inflation rate has not been enough to increase the rate paid to Livret A savers as this is to stay at 2.25%.

Although inflation has exceeded the legal level where a change should have been made - to 2.75% from February 1 - Banque de France governor Christian Noyer recommended that the government make no change as inflation is set to fall.

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