Consumer prices provisionally edged up just 0.1 percent on the month in May. With base effects quite negative, this was enough to reduce the annual headline inflation rate by fully 0.4 percentage points to 0.8 percent, its lowest mark since January.
The flash HICP was softer still, showing no change versus April and a 0.9 percent yearly rate, down from 1.4 percent last time.
However, the sharp drop in the annual inflation rate was almost wholly attributable to the more volatile components of the CPI basket. Hence, energy prices were up only 5.4 percent on the year after a 9.3 percent jump in April while food inflation slipped 0.3 percentage points to 0.4 percent. More significantly, manufactured products (minus 0.7 percent) as well as services (1.0 percent) recorded no change. As such the signs are that the core rate was broadly flat this month (0.5 percent in April).
Even so, there is nothing here to offer any real reassurance that underlying French inflation is moving in the right direction. To be sure, if it is, it is doing so very slowly.