France slips into deflation

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France slips into deflation

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Concerns the eurozone could slip into deflation have risen on the back of figures showing French inflation has turned negative.

Consumer prices fell -1.1 percent in January, giving a year-on-year inflation rate of -0.4 percent.

Energy costs were down 7.1 percent following the drop in global sales, according to figures released by Insee, the National Institute of Statistics and Economic Studies. Prices in the country dropped in January as a result of winter sales.

“If the retail sector is not doing well and must rely on heavy discounting in order to sell then it might be a negative sign for the economy,” said one analyst.