France confidence stays weak in September as inflation pressures cloud the outlook

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The latest business and household confidence data released today:France September consumer confidence 86 vs 85 expectedPrior 86France September business confidence 96 vs 97 expectedPrior 98French consumer sentiment is seen holding steady in September, although still keeping well below the long-term average reading of 100. The details reveal a slight rebound in households' opinion on future standard of living. The corresponding balance has risen by two points to -60, though also still well below the long-term average of -29. Meanwhile, unemployment prospects also showed an improvement with the corresponding balance there falling by three points to 55.That is all offset by a drop in both current and expected saving capacity among consumers though, as households' perception on prices continue to nudge higher. The latter is arguably not helped by growing inflation pressures and higher oil prices, as the associated balance of future inflation jumps to -9 - its highest since May.Meanwhile, the French business climate worsened in September and also continues to keep below its own long-term average reading of 100.The drop comes amid a slight decline in services sector sentiment, with the corresponding balance there falling from 99 to 98 in September. Meanwhile, employment conditions also reflected a marginal drop from 99 to 98 on the month and adds to the slightly more negative sentiment.Overall, this continues to highlight that household and business sentiment remains sluggish at best in the French economy.The good news is that this hasn't hurt business activity data all too much at the end of the third quarter. However, the present challenges on inflation still remain and that could very well bite at the economy more meaningfully in the next quarter. That especially if oil prices continue to hold higher and we see higher bond yields also lead to tighter financial conditions. This article was written by Justin Low at investinglive.com.