Inflation in France hit an all-time high in May, increasing pressure on the European Central Bank for aggressive rate hikes.
Inflation in France continued to rise at a record high as in Germany and Spain. Inflation in the Eurozone’s second-largest economy rose 5.8 percent in May. The annual increase in the previous month was 5.4 percent.
Rising energy and food costs triggered the rise in inflation. Data released yesterday in Germany and Spain also showed that inflation had increased to new record levels.
Inflation figures announced before the ECB’s interest rate decision next week will effectively affect the bank’s decision. It is expected that the ECB will end its open-ended asset purchases within the scope of the post-crisis measures and the negative interest rate policy that has been implemented for eight years. The rate hike is expected to start in July.
Consumer spending in France also contracted by a surprising 0.4 percent in April. The expectation was 0.5 percent increase.