That's a major blow. French household confidence falls to its lowest since 2013 in October as fiscal worries and concerns over the country's public finances weigh heavily on sentiment. That is not a good look as the index strays further away from the long-term average of 100, in which we haven't seen since December 2021.
There were marked deteriorations in sentiment among most sub-indices, as households noted worsening past and expected financial situations. Meanwhile, the sub-index measuring past and future standard of living conditions also showed a big drop in October.
Adding to those concerns, consumers are also fearing that inflation pressures are going to worsen in the months ahead. The sub-index measuring futures prices rose further to -7 points, its highest since May, and is well off the -32 points recorded in July.
Besides that, unemployment fears also picked up with the sub-index there rising by another 5 points to 61 points on the month. That marks the highest level since March 2021.
It's an all-round poor report as it signals that the French consumer climate has deterioriated markedly amid the social unrest and fiscal woes. And we're already starting to see that show up in economic data too, with French PMI figures this month already being rather disappointing.
So, this will continue to be the troubling spot for the ECB to manage amid a further growth slowdown in Europe's second-largest economy while price pressures are looking to intensify more broadly.
This article was written by Justin Low at investinglive.com.
Source: Investing Live - News
