French consumer confidence cratered to its lowest level in 13 years as a bond market selloff that sent yields soaring, weeks of social unrest sparked by far-left groups, and political instability all collided at once, casting a dark economic cloud over the European country.
New national sport in France: looting. https://t.co/dTywW4gJuK
— RadioGenoa (@RadioGenoa) October 24, 2026
Statistics agency Insee reported that its monthly consumer confidence gauge plunged five points this month, falling well below forecasts compiled by Bloomberg. This was the lowest reading since June 2013, in the aftermath of the eurozone debt crisis.
Households’ assessments of past living standards fell to their lowest since records began in 1972, while unemployment expectations hit their highest since the Covid-19 pandemic. Respondents also said their financial outlook was the bleakest in four years, and inflation expectations rose.
“The miss was broad-based: the personal financial situation outlook fell sharply to -24 from -15, unemployment concerns jumped to 61 from 56, and savings capacity deteriorated,” UBS markets analyst Nana Antiedu wrote in a note to clients earlier today.
Bloomberg Economics commented on the dire outlook, saying, “Weak sentiment is likely to weigh on spending as political uncertainty increases. This brings further downside risks to our fourth-quarter growth forecast.”
France’s mounting public debt is another concern and has become a major issue ahead of next April’s presidential election after nearly a decade under President Emmanuel Macron, who is ending his term in crisis.
Gilbert Cette, an economics professor at Neoma Business School in Paris, described the public debt as “enormous,” adding, “France’s entire economic policy is constrained by such a sizable debt level.”
Cette said France has combined higher spending with tax cuts in recent years. That combination will likely have to be scaled back as Macron’s successor confronts rising borrowing costs that compound the country’s budget challenges and could usher in a period of austerity.
Right-wing presidential candidate Marine Le Pen has released her party’s shadow budget plan, which promises €140 billion in cost savings over five years and aims to bring the deficit back below 3% by the end of the decade.
“If the French do not choose a political break, France is heading towards default,” Le Pen recently said. She has also slammed Macron’s successive governments for having failed “to anticipate the slightest economic, financial or budgetary policy capable of preventing the noose of interest payments from strangling France.”
Last Friday, France was spared a downgrade by credit rating agency Moody’s, which maintained its sovereign rating at Aa3 with a negative outlook. This has offered short-term relief, with French 10-year government bond yields trending below 5%. But the France-Germany 10-year yield spread (OAT-Bund) remains at 1.62 percentage points, or 162 basis points, a level last seen during the eurozone debt crisis.
France is not out of the woods just yet.
