French November inflation turns positive

PARIS, Dec 15 (Reuters) - French consumer prices posted their first annual rise in seven months in November data released on Tuesday showed, spurred by a hike in tobacco prices and increases in the cost of services.

National statistics office INSEE said the European-Union harmonised consumer price index rose by 0.2 percent month-on-month in November and by 0.5 percent compared to the same period a year earlier.

The readings were in line with forecasts from a Reuters poll of economists.

Tobacco prices jumped 4.2 percent compared with the previous month and 4.5 percent in the 12 months to end-November.

Services fell 0.2 percent on the month but rose 1.8 percent year-on-year, boosted by a strong rise in rents and water and waste bills.

'As expected, annual inflation stood in positive territory for the first time since April,' said Diego Iscaro, economist at IHS Global Insight.

'Inflation is likely to continue to trend upwards in the coming months, as base effects become increasingly less favourable,' he said.

Consumer prices inched up across the euro zone in November after five straight months of falls, easing any lingering deflationary fears.

But inflationary pressures remain subdued in the region due to weak consumer demand and the ongoing rise in unemployment.
(Reporting by Vicky Buffery; editing by Chris Pizzey) Keywords: FRANCE ECONOMY/CPI ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.