France:
In a respite for the French economy, inflation figures released for July 2023 marked a drop, settling at 4.3%. This is the lowest inflation rate seen since February of the previous year. The decrease from 4.5% in June came about primarily due to a 3.7% year-on-year drop in energy prices. Meanwhile, food prices remain notably high, with a 12.7% increase compared to July 2022, albeit a decrease from the 13.7% rise recorded in June.
Transportation prices went up by 5.4% over the year, while there was a significant drop in communication services, now 6.1% cheaper than the previous year. Other sectors saw varied changes – rents, water, and household waste collection increased by 3.1%, and tobacco saw a significant year-on-year hike of 9.8%.
Notably, core inflation, which takes out the more volatile price items, went down to 5.0% in July from 5.7% in June. Despite these declines, France’s inflation still surpasses the European Central Bank’s preferred target of just under 2%.
UK:
Britain, which has been grappling with an inflation rate that’s been among the highest in Western Europe (7.9% in the year leading to June 2023), reported a silver lining: a growth of 0.2% between April and June 2023. This growth rate, although modest, is a step up from the earlier quarter, and pleasantly surprised economic experts.
Darren Morgan, the Director of Economic Data for the Office for National Statistics (ONS), highlighted a robust month for the manufacturing sector, notably in the automotive and pharmaceutical industries. A warm June also contributed to a boost in the construction, food, and accommodation sectors.
Finance Minister Jeremy Hunt expressed optimism about the measures being taken to combat inflation, suggesting they’re showing results. The Bank of England’s projections further buoyed sentiments, indicating a likely avoidance of an imminent recession. Still, the UK holds the dubious distinction of having the highest inflation among G7 nations.
In other news, businesses across Europe continue to adapt, with Britain planning to issue numerous oil and gas licenses in the North Sea, and a Czech billionaire on the verge of purchasing the French supermarket chain, Casino.
Stay tuned for more updates and insights into the economic health of Europe and its key players.
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