Consumer goods prices have increased by an average 1.2% in the last year according to the most recent data, driven in particular by a rise in tobacco and service costs.
However, sharp reductions to energy (-4.5%) and communication service (-12%) costs have helped to reduce the overall impact on household budgets.
Food costs, including fresh perishable goods, rose by 1.7% and 1.6% respectively in the last year, slightly higher than the average.
The information comes from a recent report by state statistics agency Insee.
The agency predicts that in September, the price of services, and foods will have fallen slightly – partially linked to a reduction in transportation costs – but manufactured goods will have seen prices rise (final data is not yet available).
Energy and tobacco costs will have remained stable compared to August.
The increase is fairly low compared to the early 2000s and the inflation peaks following Covid-19, the latter of which saw prices increase by more than 6% between February 2022 and 2023.
Equally, the potential impact of the 2026 budget, including a possible freeze on income tax bands and low wage growth, means even a small increase has an effect.
New Prime Minister Sébastien Lecornu is reportedly looking into several measures to increase household spending power, including an end to social charges and taxes on overtime work, and reduced taxes for couples on the minimum wage.
Where consumers have experienced falling prices in the past this has increased household purchasing power, providing more money for goods, services, and leisure activities.
