France Inflation Slows to 0.7% in December as Energy Prices Fall

France’s Inflation Cools to Its Lowest in Seven Months

France saw a further cooling of inflation in December 2025, with prices rising just 0.7% year-on-year on a harmonised EU basis, according to the national statistics office INSEE. This confirmed preliminary estimates and reflected one of the slowest rates of inflation in the eurozone.

On France’s own measure, the Consumer Price Index (CPI) rose by 0.8%, slipping from 0.9% in the two previous months. The latest figures show that price pressures continue to ease across Europe as energy markets stabilise and consumer spending remains moderate.

Energy Prices Lead the Decline

The most significant factor behind the slowdown was a sharp drop in energy prices, which fell by 6.8% year-on-year, compared with a 4.6% decline in November. Fuel prices were the main driver of this drop, helping to offset modest increases elsewhere.

Other components showed mixed trends:

Food prices increased by 1.7%, slightly faster than November’s 1.4% gain.
Services inflation eased to 2.1% from 2.2%.
Manufactured goods prices dipped 0.4%, compared with a 0.3% decline in the previous month.

On a monthly basis, overall prices edged 0.1% higher, rebounding from a small decline in November. Core inflation, which excludes energy and food, ticked up slightly to 1.1%, suggesting that underlying price pressures remain contained.

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France in the Eurozone Context

France’s 0.7% inflation stands well below the European Central Bank’s (ECB) 2% target and trails the eurozone average of 2.0%, as reported by Eurostat. The ECB kept interest rates unchanged at 2.0% at its December meeting, with policymakers confident that inflationary pressures are broadly under control.

Bank of France Governor François Villeroy de Galhau recently remarked that the challenge may now be avoiding deflationary risks, warning that the “downside risks to the inflation outlook remain as significant as the upside risks.”

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What This Means for Households and 2026 Outlook

While subdued inflation is good news for households struggling with the cost of living, it also points to subdued demand across the economy. Lower energy prices will continue to ease pressure on electricity and transport costs, though food and services inflation remain sticky.

Looking ahead, the European Commission projects French inflation to average 1.3% in 2026 before slightly rising to 1.8% in 2027, partly due to higher energy and environmental costs once the EU’s ETS2 carbon pricing system takes effect.

For consumers and expats living in France, this means the cost of everyday goods should remain relatively stable heading into the new year — a welcome change after the price surges seen in previous years.