The final CPI report for July showed prices falling an unrevised 0.3 percent on the month for a 0.7 percent annual inflation rate, also in line with its provisional estimate and as well as matching the final June outturn.
The final HICP weighed in at minus 0.4 percent on the month and 0.8 percent on the year, again in line with its flash reading and similarly in line with its final June print.
On a monthly basis, the decrease in overall prices was driven by a significant seasonal drop in manufactured product prices (2.9 percent). This reflected summer sales, notably in clothing and footwear (14.8 percent). Energy was also down 1.3 percent. By contrast, service sector prices accelerated, posting a 1.0 percent bounce on the back of sharply higher air fares.
Seasonally adjusted, the CPI was only flat for the second month in a row. The core index was similarly steady at its June mark, although this was enough to nudge the underlying annual rate a tick firmer to (a still very soft) 0.5 percent.
Despite increasing signs of improvement in the French real economy, prices remain becalmed due to excess capacity and persistently tight product markets. Economic growth will need to sustain its recent pick-up if core inflation is to get anyway near the 2 percent mark over the foreseeable future.