France Follows Germany With Stronger-Than-Expected Inflation

(Bloomberg) --

French inflation slowed less than expected, raising pressure on the European Central Bank to reassess its plan to exit crisis-era stimulus more gradually than counterparts in the U.S. and U.K.

Consumer prices in the euro area's second-largest economy rose 3.3% from a year earlier in January, a sharper gain than the 2.9% economists estimated following December's 3.4% advance.

The reading follows data Monday from Spain and Germany that also showed inflation rates running higher than expected at the start of 2022.

The stronger price picture in the euro region represents a growing challenge for the ECB after policy makers repeatedly said the surge would prove temporary. While the Frankfurt-based institution is slowly winding down pandemic-era support, the Bank of England already raised rates in December and the U.S. Federal Reserve has declared itself ready to do the same soon.

France's monthly report showed an acceleration of price growth in services and food. Energy costs, which have been the main driver of inflation in Europe, rose 19.7% from a year ago in January after jumping 18.5% in December.

Energy's effect on French inflation may not be as acute as in other countries in the coming months after the government pledged more than 15 billion euros ($16.8 billion) to shelter households from the hit. It's also moved to ensure a cap on bills by forcing state-controlled utility Electricite de France SA to sell more power at a discount.

“If everyone makes an effort we'll be able to get through this period in the most bearable way possible,” Finance Minister Bruno Le Maire told Europe 1 radio on Tuesday.