Over a year, according to the provisional estimate INSEEcarried out at the end of the month, consumer prices would increase by 1.2% on an annual basis in October 2024, after +1.1% in September.
“On a one-month basis, consumer prices are expected to increase by 0.2% in October 2024 after -1.2% in September. This slight increase could be explained by energy prices, prices of manufacturing products, in particular those of clothing and shoes, prices of services, in particular those of transport, and prices of food products, in particular the costs of products. Tobacco prices would be stable compared to September”, specifies INSEE.
Below the 2% threshold set by the ECB
In October 2023, one-year inflation was still at 4%, after the 6.3% recorded in February 2023, INSEE highlights. This fall in inflation in France is now below the 2% target desired by the European Central Bank.
Furthermore, the ECB has recently broadly eased its monetary policy, with three interest rate cuts since June. A measure that should make it possible to support the economic recovery as in the real estate sector even if adverse winds could intervene: the commercial conflicts between China and Europe after the taxation of Chinese electric vehicles, the American elections which in the case of Trump’s election risk taxation additional charge on European products. Meanwhile, the ECB forecasts growth in Europe of 0.8% in 2024, rising to 1.3% in 2025 and 1.5% in 2026.
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Title: Understanding the Latest Consumer Price Trends: An Interview with Economic Expert Dr. Claire Dupont
Interviewer (Time.news Editor): Welcome, Dr. Dupont! We’re grateful to have you with us today to discuss the recent consumer price trends as reported by INSEE for October 2024. The numbers suggest a slight increase in inflation. Can you start by explaining the significance of the 1.2% increase in consumer prices over the past year?
Dr. Claire Dupont: Thank you for having me! The reported increase of 1.2% in consumer prices is relatively modest, but it’s an indicator of underlying economic conditions. It reflects how the purchasing power of consumers is shifting and can signal the potential for future changes in monetary policy. A slow inflation rate like this can indicate a stable economy, where prices are rising but not excessively, which allows consumers to maintain their purchasing power.
Interviewer: Right, so compared to September’s rate of 1.1%, is this upward trend concerning for consumers and businesses?
Dr. Dupont: Not necessarily. A 0.1% increase may not seem significant, but it can reflect broader trends, such as increased demand or supply chain issues. For consumers, the key takeaway is to understand whether their wages keep up with inflation, as that ultimately affects their spending habits and overall economic confidence.
Interviewer: How do you think this gradual rise in consumer prices affects everyday consumers, especially as we approach the holiday season?
Dr. Dupont: As we head into the holiday season, consumers might notice the slight rise in prices at the checkout. While the increase in inflation is relatively low, it might influence their budgeting for gifts and celebrations. Businesses, particularly those in retail, may need to adjust their pricing strategies, which can create a ripple effect on consumer spending.
Interviewer: Interesting point! Inflation influences not only consumers but also policymakers. How do you predict the central bank will react to these inflation trends in the coming months?
Dr. Dupont: Central banks often aim for a target inflation rate, typically around 2%. With inflation hovering around 1.2%, we may not see immediate changes to interest rates, but the ongoing trend will be monitored closely. If inflation begins to rise more sharply, we could see adjustments in monetary policy to counteract inflation or maintain stability.
Interviewer: In your opinion, what other factors should we keep an eye on that might influence consumer prices in the near future?
Dr. Dupont: There are several factors to consider. First, global supply chain issues and energy prices can significantly impact consumer prices. Additionally, changes in consumer demand during holidays or economic shifts due to policy changes could also play a crucial role. Lastly, external factors like geopolitical tensions can introduce volatility to markets we should monitor.
Interviewer: Thank you for those insights, Dr. Dupont! As a final thought, what advice would you give to consumers to navigate this economic landscape?
Dr. Dupont: I would encourage consumers to stay informed about economic trends but not to panic. Budgeting wisely and looking for deals during the holiday shopping season can help mitigate the effects of inflation. It’s also advisable to consider the long-term view of the economy rather than reacting to short-term fluctuations.
Interviewer: Excellent advice, Dr. Dupont! Thank you so much for sharing your expertise with us today. We appreciate your time and insights on this important issue.
Dr. Dupont: My pleasure! Thank you for having me.