French CPI gains fall short of forecasts in January

The cost of living in France jumped in January amid strong gains for both food and energy prices but outside of those areas consumer price increases were subdued, economists said.

France´s consumer price index advanced at a 1.3% year-on-year clip, according to INSEE, a significant acceleration from the 0.6% rise observed over the previous 12-month stretch.

However, economists had penciled in a 1.4% rate of increase for headline consumer prices.

The rate of food inflation jumped from 0.7% in December to 1.3% in January, as inclement weather in Southern Europe boosted fresh food prices.

In parallel, energy prices were ahead by 10.3% year-on-year as a result of so-called negative 'base effects'. During the same month of 2016 crude oil prices had crashed.

'Core' inflation, which excluded the more volatile CPI items such as energy and food picked up from a 0.4% clip in December to 0.7% in January, as the effect of dearer transport costs kicked in.

Clothes prices also pushed core inflation higher, while communications prices "oddly" fell by 1.1%, Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics said.

Vistesen added: "overall, inflation pressures in France are rising, but core inflation remains subdued."