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French inflation jumps to highest rate since 1991

French inflation accelerated to its highest level since at least 1991 in June, official data showed Thursday, as food and energy costs have surged since Russia's invasion of Ukraine. Consumer prices jumped 5.8 percent compared to the same month last year, with energy soaring 33.1 percent and food rising 5.7 percent, statistics agency Insee said…

[FILES] French President Emmanuel Macron (Photo by Ludovic MARIN / AFP)

French inflation accelerated to its highest level since at least 1991 in June, official data showed Thursday, as food and energy costs have surged since Russia’s invasion of Ukraine.

Consumer prices jumped 5.8 percent compared to the same month last year, with energy soaring 33.1 percent and food rising 5.7 percent, statistics agency Insee said in its preliminary release.

Price growth was 6.5 percent when measured using the Harmonised Index of Consumer Prices — the preferred yardstick of the European Central Bank, tasked with checking inflation in the 19-nation eurozone.

Despite the increase, “this data is probably one of the first indications that we are approaching peak inflation” in France, ING analyst Charlotte de Montpellier said.

She added that price growth should begin slowing by the end of 2022 as energy prices stabilise and the economy slows from its sharp Covid-19 rebound.

But a politically divided parliament may struggle to maintain support to households that has kept inflation milder than in other European countries.

Across the currency bloc, consumer prices rose 8.1 percent in May, far higher than the ECB’s target of two percent.

Inflation has spiked since Russia’s February 24 invasion of Ukraine, which has drawn unprecedented Western sanctions — including on some of its energy exports — and blocked supplies of Ukrainian grain from reaching world markets.

While world leaders scramble to unblock food shipments and find alternative energy sources, central banks must pursue their inflation-fighting mandates with little sense of when the price pressures might end.

Managing the money supply at present “is not a science”, ECB chief Christine Lagarde told a central banking conference in Portugal on Wednesday. “What we are doing there is an element of art”.