Bond Selloff and Riots Deal Dual Blow as French Consumer Confidence Index Falls to 13-Year Low

Title context: Bond Selloff and Riots Deal Dual Blow as French Consumer Confidence Index Falls to 13-Year Low Text: French households are coming under mounting pressure from a bond-market selloff and protests that descended into riots, among other shocks, pushing consumer confidence in France to the lowest level in 13 years. Insee, the national statistics agency, said Tuesday that the consumer-confidence index fell 5 points to 80 in October. That was below the median estimate of 85 in a poll of media outlets and below all economists' forecasts. Households' concerns about their personal finances, standard of living and unemployment all intensified. French consumer confidence falls to lowest level since 2013 Against a backdrop of recurring inflation and an unstable political and budgetary situation, the index has been below its long-term average of 100 for five consecutive years. In recent weeks, however, the situation facing France has deteriorated markedlythe minority government is once again locked in a standoff over austerity measures, investors are selling French government bonds, driving borrowing costs sharply higher, and protests have escalated further. On Oct. 17, tensions finally turned violent. Demonstrations over the cost of living erupted into clashes, looting broke out in many parts of France, and thousands of people were arrested. Insee's latest consumer-confidence data do not yet reflect the full impact of these tensions. Although the survey data were collected through Oct. 19, most respondents' answers were gathered at the start of the three-week survey period. French inflation expectations rise The consumer-confidence report also showed that inflation expectations heated up, with a higher share of households expecting prices to rise over the next 12 months. Data due Friday are expected to show that France's October inflation rate accelerated further to 3.6%. GDP data released the same day may show that the French economy grew just 0.1% in the third quarterafter stagnating in the previous quarter and contracting at the start of the year.