Bankinter | Moody’s maintained its rating at Aa3 but downgraded the outlook from stable to negative. The rating is based on a “rich and diversified” economy that benefits from a “more benign demographic profile than many other advanced economies.” “The strength of household and corporate balance sheets, as well as a solid banking sector, contribute to macroeconomic stability and the economy’s ability to absorb shocks.” However, it notes that “political…

Bankinter | S&P unexpectedly downgraded France’s credit rating to A+ with a stable outlook (from AA- with a negative outlook, since February 2025). S&P noted that ‘uncertainty over public finances remains high’ and that in the ‘absence of significant additional measures to reduce the deficit’, consolidation will be ‘slower than previously anticipated’. Furthermore, ‘the lack of visibility on the fiscal consolidation plan is weighing on France’s economic growth’. Bankinter analysis…

Bankinter | Preliminary CPI rises less than expected in September. Year-on-year 1.2% versus 1.3% expected versus 0.9% in August. In month-on-month terms, negative 1.0% versus negative 0.9% versus a rise of 0.4% previously. Producer prices rise (year-on-year) 0.1% versus 0.5% previously (revised from 0.4%). In month-on-month terms, down 0.2% versus 0.5% previously (revised from increase of 0.4%). Finally, consumer spending (year-on-year) fell 0.8% versus 0.3% expected and 0.4% previously (revised…

Bankinter | Prime Minister Bayrou proposes a €43.8 billion adjustment to the 2026 budget. The aim is to reduce the deficit, which stands at -5.8% in 2024 (as opposed to -3.1% in the EMU, -2.8% in Germany, -3.4% in Italy and -3.2% in Spain) to -4.6% in 2026, with a commitment to reach -3% in 2029. The government’s projections point to a figure of -5.4% in 2025. The measures presented…

The weekend ends with a focus on France, following the resignation of Prime Minister Michel Barnier due to the no-confidence motion backed by Marine Le Pen’s far-right party. According to Le Pen, the outgoing administration’s plan to bring the budget gap down to 3.0% by 2029 was not credible for the country, and a “reasonable trajectory” based on wealth creation and savings is needed. “We want to absorb the deficits,…