French inflation spikes in March


Paris (AFP)

Inflation in France bounced back in March, data showed Friday, bolstering hopes that consumer prices in the eurozone are finally moving towards more growth-friendly levels.

French annual inflation spiked to 1.5 percent this month, up from 1.2 in February, mostly thanks to price rises in services, food and tobacco products, statistics office INSEE said in a first estimate.

The figures from France, the eurozone's second-biggest economy, came a day after powerhouse Germany reported a rebound in inflation to 1.6 percent in March, after 1.4 percent the previous month.

While still short of the 2.0-percent level that the European Central Bank (ECB) considers to be conducive to healthy economic expansion, inflation in Europe's key economies has become less sluggish after years of anaemic price movements as economic growth picks up.

To kickstart consumer prices, the central bank has bought more than 2.3 trillion euros ($2.8 trillion) of government and corporate bonds and set interest rates at historic lows, hoping to pump cash through the financial system and into households and businesses.

Month-on-month, French prices rose by a full 1.0 percent in March, having remained flat in February from the previous month.

Measured using the ECB's preferred yardstick, the Harmonised Index of Consumer Prices (HICP), price growth amounted to 1.7 percent, faster than Germany's 1.5 percent.

Separately on Friday Italy, the eurozone's third-biggest economy, said its inflation rate also rose in March, to 0.9 percent, after 0.5 percent in February.