French Inflation Surges to Three Percent Amid Energy Crisis

French inflation hit three percent in September, its highest level since February 2024. This sharp increase from 2.4 percent in August is largely due to soaring energy costs caused by the Middle East war.

The European Central Bank (ECB) is likely to raise interest rates further to combat this inflation, which is well above its two percent target.

Diesel prices have reached record highs not only in France but also in Italy, Germany, and several other eurozone countries. Analysts at ING predict that French inflation will remain above three percent for the rest of 2026 before gradually declining in 2027.

Consumer spending fell 0.5 percent in France in August, and the country's public debt stands at 119 percent of GDP, nearly double the eurozone limit of 60 percent.