Inflation slows, so why does your bill not fall

Inflation measures changes in a general price level using a basket of goods and services. The ECB explains that purchases carry different weights. One item can become cheaper while the overall basket rises.

Disinflation means that prices rise more slowly. Deflation means that the general price level falls. These are not interchangeable concepts.

INSEE reports average annual consumer-price inflation of 0.9% in France in 2025, after 2.0% in 2024. These are historical annual averages, not the latest monthly rate.

Illustrative example: a basket priced at 100 rises by 10% to 110. A further 2% increase takes it to 112.20, not 102. The rate has slowed while the price level has continued to rise.

Housing, transport and food account for different shares of different households' spending. Frequently purchased or particularly noticeable items may also dominate perceptions.

A difference between experience and the aggregate does not, on its own, invalidate the index. It calls for comparing its coverage and weights with the actual household budget.

Purchasing-power changes depend on available income and expenditure, not only on a headline inflation number. Two people facing the same prices can experience very different outcomes.

A recent pay increase may not reverse earlier losses. Equally, one expensive bill is not evidence that all prices are rising at that same rate.

Check whether a figure describes a monthly change, a year-on-year rate or an annual average. For purchases, also compare quantities, quality and unit prices.

Tracking a few significant budget categories can explain divergence from the aggregate. It does not provide an investment prescription or a reliable forecast of future prices.