By Sudip Kar-Gupta
PARIS (Reuters) – French annual inflation rose unexpectedly to 7.2% in February from 7.0% in January, partly as a result of higher food prices, according to preliminary figures from the INSEE statistics body on Tuesday.
The February preliminary inflation figure came in above Reuters forecasts, which had predicted a figure of 7.0%.
Finance Minister Bruno Le Maire, who has said he expects inflation to reach a peak this summer and then start to ease, has been meeting French food retailers to find ways to help shoppers cope with high food price inflation.
Industry data published on Tuesday also showed that British grocery inflation hit 17.1% in the four weeks to Feb. 19, as disruptions to food supply routes caused by the war in Ukraine impacted commodity prices.
“The February data shows that French inflation has not reached its peak yet. Given how underlying global inflation will probably continue to go up in the coming months, that will give further arguments to the European Central Bank to continue to raise rates beyond the first quarter,” said ING economist Charlotte de Montpellier.
European Central Bank (ECB) chief economist Philip Lane told Reuters in an interview on Tuesday that while euro zone inflation pressures had begun to ease, the ECB will not end rate hikes until it is confident price growth is heading back towards 2%.
The ECB has already promised to raise rates by 50 basis points to 3% in March and markets expect this rate to rise to nearly 4% by the end of 2023.
(Reporting by Sudip Kar-Gupta; Editing by Andrew Heavens and Christina Fincher)
