Official statistics released on Tuesday showed that in France and Spain, consumer prices began rising again in February, as higher food and energy costs drove prices back upward.
Preliminary data from the statistics bureau Insee showed that the consumer price index in France increased by 6.2%, compared to 6.0% in January.
According to the report, food inflation rose to 14.5% from 13.3%, service prices rose to 2.9% from 2.6%, and the prices of manufactured goods were up to 4.6% from 4.5%, as winter sales ended. Energy prices were up 14.0% year on year, according to Insee’s data.
The EU-harmonized index came in at 7.2% compared to January’s 7.0%.
Spain meanwhile, has now seen inflation rise for two consecutive months in annual terms, after successfully containing it in the second half of 2022.
Consumer prices were up 6.1% year over year in February, according to the National Statistics Institute (INE).
According to the preliminary data, higher electricity and food prices were the primary cause of the increase.
Core inflation, excluding volatile measures like fresh food and energy prices, came in at 7.7% year over year, rising from 7.5% in January. Harmonized for comparison with other European Union nations, consumer prices rose to 6.1% in February in annual terms, up from January’s 5.9%.
Bloomberg economist Ana Andrade said, “The increase in Spain’s headline EU harmonized inflation is another reminder that the path of price growth will be choppy and sticky on its way down, as underlying price pressures remain strong. While base effects will dominate over the next few months, bringing inflation meaningfully down by the summer, we still expect it to end the year at above 5%.”
Analysts expect that Spain and France will continuer to see inflation rise over the coming months, with more interest rate hikes in response from the European Central Bank (ECB).
The ECB has already indicated the March meeting will see a 50 basis point hike to 3%, in hopes of bringing the soaring inflation in the bloc back under some semblance of control.
However, Bundesbank President Joachim Nagel has warned the central bank may need to continue to continue to raise rates significantly after that if inflation remains too high.
