Inflation in France was set at 0.8% year-on-year in December 2025, according to the consumer price index published by INSEE. This historically low level masks very different sectoral dynamics, and especially a trajectory that reversed at the beginning of 2026.
To consult the INSEE figures on inflation 2025 in detail, a breakdown by category allows for a better understanding of current issues.
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Underlying inflation in France: the signal that the overall CPI does not show
The overall consumer price index includes volatile components (energy, fresh food) and public tariffs (tobacco, electricity). These categories amplify or mask the underlying trend. To read it, INSEE publishes a distinct indicator: underlying inflation.
In December 2025, overall inflation was +0.8% year-on-year. Underlying inflation, on the other hand, began to accelerate gradually, rising from +0.7% in January 2026 to +0.9% in February 2026. This lag signals that price pressures are spreading beyond energy and food, towards services and manufactured goods.
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This distinction matters for households. A decline in energy prices may give the impression that things are improving, while the basket of everyday consumption (insurance, dining, rents) continues to rise. Underlying inflation captures this silent erosion of purchasing power.
Energy and TICPE: why prices are rising again in 2026
In 2025, the decline in energy prices pulled overall inflation down. INSEE recorded a significant drop in this category in December 2025. The situation reversed in spring 2026, with energy inflation soaring to +14.2% in April 2026.
The government introduced a temporary adjustment to the TICPE (domestic tax on the consumption of energy products) in March 2026 to mitigate the impact of rising oil prices. This measure was not enough to contain the shock.
The mechanism is straightforward: energy weighs in the calculation of the CPI well beyond its share in the average budget, because its variations are substantial. When the energy category shifts from negative to strongly positive in a few months, the overall index flips. This is exactly what happened between late 2025 and early 2026.
What this changes for the consumer price index
The French CPI hit a low point at the end of 2025. The rise in energy prices, combined with the spread of inflation into services, brought the HICP (harmonized index, comparable at the European level) back to +2.5% in April 2026. This level places France among the eurozone countries where the inflationary recovery is the fastest, despite a low base in 2025.
Bank of France forecasts: inflation below 2% but risks tilted downwards
The macroeconomic projections of the Bank of France published in December 2025 anticipated a gradual rise in inflation, remaining below 2% over the forecast horizon. The central scenario expected a moderate recovery, driven by household consumption and an increase in the purchasing power of average wages.
The Bank noted that the risks to activity were generally balanced, but rather tilted downwards for inflation. In other words, the probability of lower-than-expected inflation was deemed slightly higher than that of an upward drift.
The events of the first quarter of 2026 (rising oil prices, geopolitical tensions) partially invalidated this scenario. Double-digit energy inflation in April was not included in the December projections.
Comparison France and eurozone: reading the HICP 2025-2026
The HICP allows for comparisons of inflation levels between eurozone member countries on a common methodological basis. In 2025, France recorded an average annual inflation of 0.9%, significantly lower than that of Germany (2.2%), Spain (2.7%), or the United Kingdom (3.9%).
This differential can be explained by several factors:
- The electricity price shield, maintained longer in France, contained energy prices in 2025 when other countries had already removed their measures
- The weighting of services in the French consumption basket differs, with a relatively lower weight of rents in the CPI
- Food prices slowed down faster in France than in Germany or Spain, contributing to a lower overall CPI for the year
Italy, with an average inflation of 1.5% in 2025, remains the only major country in the zone to show a comparable level. The convergence observed in April 2026 (French HICP at +2.5%, close to the eurozone average) suggests that the French advantage of 2025 has largely dissipated.
Impact on household consumption and economic outlook
The Bank of France anticipated that household consumption would support the recovery over its projection horizon. The purchasing power of average wages was expected to increase, which would allow for a rebound in domestic demand.
Field surveys conducted in early 2026 show a more nuanced reality. Households have significantly reduced their non-essential spending, in response to the perceived rise in prices. The gap between measured inflation and perceived inflation, a phenomenon documented by INSEE since the 2000s, amplifies this cautious behavior.
The unemployment rate, projected at 7.8% in 2026 by the Bank of France before falling to 7.6% in 2027, also weighs on confidence. Business investment, expected to gradually strengthen, remains contingent on a reduction in fiscal and budgetary uncertainty.
The reduction of the public deficit, likely close to 5% of GDP in 2026 according to the Bank of France’s projections, would be insufficient to stabilize the debt ratio. This budget constraint limits the room for maneuver to extend support measures for energy prices.
The year 2025 will remain in INSEE data as a low point for inflation, at an average of 0.9%. The rapid rise observed in early 2026, driven by energy but now also reflected in the spread to services and manufactured goods, redraws a very different landscape from that which prevailed just six months earlier.