The latest Consumer Confidence index for France, released on November 25, 2025, registered at 89, down from 90 in October and missing the consensus estimate of 91, according to the Sigmanomics database. This figure remains steady compared to the 12-month average of 89, indicating a plateau in consumer sentiment after a period of volatility earlier this year.

Drivers this month

• Rising energy costs and inflationary pressures continue to dampen household optimism.
• Labor market stability provides some support, with unemployment steady near 7.10%.
• Geopolitical risks, including tensions in Eastern Europe, contribute to cautious consumer outlooks.

Policy pulse

Consumer confidence remains below the pre-pandemic average of 95, reflecting the impact of ongoing monetary tightening by the European Central Bank (ECB). The ECB’s recent 25 basis point rate hike in October aims to curb inflation, which remains elevated at 4.20% YoY, above the 2% target. Financial conditions have tightened, with 2-year French government bond yields rising to 2.10%, pressuring borrowing costs for households.

Market lens

In the immediate aftermath of the release, the EUR/USD currency pair dipped 0.15%, reflecting investor caution. French equity markets, represented by the CAC 40, showed a mild 0.30% decline, signaling tempered risk appetite. Breakeven inflation rates for France’s sovereign bonds edged slightly lower, suggesting market expectations of easing inflationary pressures over the medium term.

Consumer confidence is a leading indicator of household spending, which accounts for roughly 55% of France’s GDP. The November reading of 89 aligns with a broader macroeconomic environment marked by moderate growth and persistent inflation.

Inflation and employment

Inflation remains a core concern, with the Harmonized Index of Consumer Prices (HICP) at 4.20% YoY in October, down slightly from 4.50% in August but still well above the ECB’s target. Wage growth has been modest at 2.30% YoY, insufficient to fully offset price increases, thereby squeezing real incomes.

Fiscal policy & government budget

France’s fiscal stance remains cautious. The government’s 2025 budget projects a deficit of 3.10% of GDP, slightly above the EU’s 3% threshold but improved from 3.50% in 2024. Public investment focuses on green energy and digital infrastructure, aiming to support long-term growth despite short-term fiscal constraints.

External shocks & geopolitical risks

Energy price volatility, driven by geopolitical tensions in Eastern Europe and supply chain disruptions, continues to pressure consumer costs. The ongoing conflict in Ukraine and sanctions on Russia have contributed to elevated natural gas prices, impacting household utility bills and industrial production costs.

Drivers this month

• Shelter costs contributed 0.12 points, reflecting stable housing markets.
• Energy prices subtracted -0.25 points, the largest drag due to rising utility bills.
• Durable goods sentiment declined by -0.10 points amid supply chain concerns.

Policy pulse

The ECB’s rate hikes have tightened credit conditions, with mortgage rates rising to 3.50%, dampening housing market enthusiasm. Consumer credit growth slowed to 1.20% YoY, the lowest in two years.

Market lens

Immediate reaction: EUR/USD dipped 0.15% post-release, while CAC 40 fell 0.30%. The market interpreted the miss as a signal of persistent economic headwinds, with bond yields slightly retreating from recent highs.

Looking ahead, consumer confidence in France faces a complex interplay of factors. Inflation is expected to moderate gradually, but energy price volatility and geopolitical risks remain significant uncertainties.

Bullish scenario (30% probability)

• Inflation falls below 3% by mid-2026, boosting real incomes.
• ECB signals pause in rate hikes, easing financial conditions.
• Geopolitical tensions ease, stabilizing energy markets.
• Consumer confidence rises above 92, supporting stronger consumption growth.

Base scenario (50% probability)

• Inflation declines slowly to around 3.50% by late 2026.
• ECB maintains current rates, with gradual normalization of credit conditions.
• Geopolitical risks persist but do not escalate significantly.
• Consumer confidence remains near current levels, fluctuating between 88 and 90.

Bearish scenario (20% probability)

• Energy prices spike due to renewed geopolitical conflict.
• Inflation remains above 4%, eroding purchasing power.
• ECB forced to tighten further, increasing borrowing costs.
• Consumer confidence falls below 85, leading to weaker consumption and growth.

France’s November 2025 Consumer Confidence reading of 89 signals a cautious consumer outlook amid persistent inflation and geopolitical uncertainty. While the labor market remains stable, rising costs and tighter financial conditions constrain spending. The data suggests a fragile recovery, vulnerable to external shocks but supported by prudent fiscal policy and gradual monetary normalization.

Policymakers and investors should monitor inflation trends, energy prices, and geopolitical developments closely. Consumer sentiment will be a critical barometer for the health of domestic demand and the broader economic trajectory in 2026.

Key Markets Likely to React to Consumer Confidence

Consumer confidence data often drives movements in equity, currency, and bond markets in France and the Eurozone. Key instruments to watch include the CAC 40 index, EUR/USD currency pair, and French sovereign bonds. Additionally, correlated assets in the energy and technology sectors may reflect shifts in consumer sentiment.

• CAC40 – France’s benchmark equity index, sensitive to domestic consumption trends.
• EURUSD – Euro to US Dollar exchange rate, reacts to economic sentiment and ECB policy.
• BNP – Major French bank, impacted by credit conditions and consumer borrowing.
• BTCUSD – Bitcoin, often viewed as a risk sentiment barometer in volatile markets.
• USDCAD – US Dollar to Canadian Dollar, influenced by energy prices which affect French consumer costs indirectly.

Consumer Confidence vs. CAC40 Since 2020

Mini-chart insight: Since 2020, the CAC 40 has shown a positive correlation (~0.65) with France’s Consumer Confidence index. Periods of rising confidence typically coincide with equity rallies, while dips in sentiment precede market corrections. The 2025 plateau in confidence aligns with a sideways trend in the CAC 40, underscoring the importance of consumer sentiment as a market driver.

FAQs

What does the November 2025 Consumer Confidence reading indicate for France?

The 89 reading suggests cautious consumer sentiment amid inflation and geopolitical risks, signaling moderate growth prospects.

How does consumer confidence affect the French economy?

It influences household spending, which drives over half of France’s GDP, impacting overall economic growth and business cycles.

What are the main risks to consumer confidence in France?

Key risks include persistent inflation, energy price shocks, tighter monetary policy, and geopolitical tensions affecting market stability.

Takeaway: France’s consumer confidence remains fragile but stable, balancing inflationary pressures and geopolitical risks against steady labor market conditions. The outlook hinges on inflation moderation and geopolitical developments in 2026.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 11/25/25