Lower inflation, better jobs in France

While the UK, US and much of the EU are gripped by a cost-of-living crisis heightened by Russia’s invasion of Ukraine, in France, President Emmanuel Macron’s “tariff shield” is helping keep control on rising prices.

Inflation there hit 4.5% in March, and while this was up from February’s 3.6%, it remains one of the lowest rates in the industrialised west and well below the UK’s 6.2%, Germany’s 7.3%, Spain’s 9.8% and 11.9% in the Netherlands. A decision last year to limit the amount by which France’s largely state-owned energy companies could increase prices has benefited consumers and taken some of the inflationary pressure off industries that depend on gas and electricity.

In France, where about two-thirds of power comes from Électricité de France’s nuclear plants, the electricity component of inflation has increased by 4% in the past 12 months, but by an average of more than 27% in the eurozone generally.

Business investment is high in France but down in the UK. Labour shortages there are restricted to discrete corners of the economy, thanks to the expansion of a German-style apprenticeship scheme that the British government promised, but has yet to deliver.