France’s inflation hit a record high in February, adding pressure on the European Central Bank (ECB) to raise interest rates even further. The soaring costs of living also create increased political risks for French President Emmanuel Macron.
According to France’s Consumer Price Index (CPI), the country’s inflation rose to 7.2% year-on-year, up from 7% in January, mainly due to the increase in food and service costs.
As the second-largest economy in the eurozone, France’s high inflation reinforces the ECB’s plan to raise interest rates by 0.5% in March, as well as the opinion of group officials who believe that more rate hikes are needed to control inflation.
Later this week, the ECB will collect inflation data from across Europe, with a primary focus on core inflation. While the headline inflation in the eurozone countries may slow down, economists still expect the Eurozone inflation report to be released on Thursday, March 2, to fall from 8.6% to 8.3%.
The record high inflation in France and the eurozone countries is creating growing concerns and pressure on the ECB to control rising prices. The continuous rise of inflation is expected to have a significant impact on the economy, including reduced purchasing power, decreased consumer spending, and the weakening of the euro.