Other sites of Banque de France

Language switcher

February 2018

By Yannick Kalantzis and Jean-François Ouvrard

A EUR 10 rise in the price of oil results in a 0.4% increase in consumer prices in France and the euro area. A significant part of this rise can be attributed to the non-energy components of the consumer price index. This indirect effect amounts to 0.1 percentage point in the euro area and 0.15 percentage point in France.

Actual inflation and inflation simulated with a constant oil price in the euro area (% change, yoy) Source: Eurostat, authors' calculations. Note: at each date, the oil price is assumed to be constant over the two previous years.

Since 2008, growth in nominal industry-level wage floors in France has slowed progressively. In a near-zero inflation environment, wage floors have risen by less than 1% per year since 2014. Increases in negotiated wages are largely determined by past inflation and by changes in the national minimum wage (NMW). As a result, the upturn in inflation observed in 2017 could lead to slightly stronger growth in nominal negotiated wages in 2018.

By Edouard Jousselin with Simon Ray

In 2017, the French real estate market continued its recovery. It was fueled by households’ borrowing capacity: household income increased and lending conditions remained favourable. This situation can be explained by low interest rates and long loan terms. After rising by 20% between 2014 and 2016, households’ borrowing capacity stabilised in 2017.

Chart 1: the real estate market recovery continued in 2017 - Year-on-year % change Sources: Insee-Notaires; Ministry of the Environment, Energy and the Sea

Google, Apple, Facebook and Amazon are giant companies that reflect the more general phenomenon of concentration which is intensifying in most sectors in the United States. This trend is contributing to an increase in the share of profits and to a decrease in the share of labour in domestic income, as well as to a deepening of inequalities. It is also associated with a decline in the creation rate of new firms and jobs, which could in the longer term weigh on US growth.