French private sector activity posts strongest growth in 25 months as demand conditions improve, PMI shows

France’s private-sector activity returned to expansion territory in September, posting its strongest growth in 25 months as demand improved—while price pressures accelerated, according to flash PMI data. The services flash PMI rose to 51.4 versus 48.3 expected (prior 48.0), the highest reading in 10 months for the sector. The flash manufacturing PMI was 50.3 versus 50.9 expected (prior 51.1), and the composite flash PMI came in at 51.2 versus 48.7 expected (prior 48.5). The report showed sales activity improving and exports becoming a smaller drag, but employment fell and business optimism weakened further. The ECB-focused takeaway is faster inflation: both input and output prices rose at quicker rates for the first time since May. Markets priced roughly 47% odds of a 25 bps ECB hike in October.