French inflation rises, backing EU rate hikes
The data reported an unexpectedly accelerated inflation in France during July, with consumer prices rising by 2.4%, surpassing the forecasted 2%. This increase is attributed to a 12.4% rise in energy prices and a growth in service sector inflation to 2.3%, driven by escalating conflicts in the Middle East and high temperatures. These developments bolster the likelihood of the European Central Bank raising interest rates by 25 basis points at its upcoming meeting. Additionally, French officials have expressed concern over rising public debt and government deficits, with projections indicating an increase in the deficit from 5.1% to around 7% of GDP by 2030.
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