French consumer prices rose less than expected in March, and the Bank of France delivered an upbeat outlook for business activity in the euro zone's second largest economy.
France's consumer price index rose 0.4 per cent in March month-on-month on an EU-harmonised basis and 1.7 per cent year-on-year, national statistics office INSEE said.
The monthly rise was below the forecast of a 0.5 per cent increase made by a Reuters poll of economists. That will be good news for the European Central Bank, which aims to keep the euro zone inflation rate below, but close to, 2 per cent.
The EU's statistics office estimated the bloc's inflation rate was 2.2 per cent in March, down from 2.3 per cent in February.
In an upbeat report on the French economy, the Bank of France said its March business survey pointed to economic growth of 0.7 per cent in the first quarter of 2006, higher than a previous estimate of 0.6 per cent.
The central bank, which sounds out some 12,000 firms each month, said its business climate index rose to 108 in March from 103 in February. "The outlook for activity over the coming months remains favourable," the bank said. "The flow of new orders increased, both on domestic and foreign markets."