French firms flag inflation turning point – central bank survey

PARIS (Reuters) – Fewer French firms expect to raise their prices this month in a possible sign inflation has reached an inflection point, while labour shortages have hit record levels, France’s central bank said on Tuesday in monthly business climate survey.

For the second month running, the share of companies planning to raise prices was lower as pressure from raw materials prices eased, the Bank of France said in its monthly survey of 8,500 firms.

Some 36% of industrial firms reported they had raised prices in June and only 29% expected to do so this month, while 25% services firms raised prices in June and 23% planned increases in July, the survey found.

The percentage of companies reporting difficulties recruiting enough staff rose to 58%, the highest since the central bank began asking firms about the problem last year.

Against that background, the central bank estimated the French economy probably grew by 0.25% in the second quarter from the previous three months, unchanged from its previous estimate.

(Reporting by Leigh Thomas; editing by Barbara Lewis)