A very late PS: France avoided being downgraded by Standard & Poor’s.
The rating agency left the French credit rating unchanged at AA, with a negatve outlook due to “downside risks to our forecast for France’s public finances amid its already elevated general government debt”.
That should please Paris, given the efforts by ministers to persuade S&P not to lower its credit rating.
Reuters has more details:
S&P said that it now expects a slightly smaller public sector budget deficit following a recent update of the government’s long-term financial plans that aim to cut the deficit to 2.7% of economic output in 2027 from 4.9% this year.
The ratings agency also said that it looked positively on a reform of unemployment benefits last year and a law passed this year to raise the retirement age two years to 64, which sparked weeks of protests and strikes.
S&P spares France from rating downgrade https://t.co/DUG5XKOn9a pic.twitter.com/LTPCV04jWf
— Reuters (@Reuters) June 3, 2023
FTSE 100 gains 1.5%
And finally, the London stock market has racked up its best day since late March.
The blue-chip FTS 100 index has closed 117 points higher at 7607 points, up over 1.5% today.
That recovers its losses earlier this week, when recession worries were weighing on the markets.
Insurance group Prudential (+5.6%) was the top riser, followed by copper miner Antofagasta (+5.5%) and commodity giant Anglo American (+5.15%).
Analysts at ABN Amro sum up today’s jobs report:
The takeaway is that the labour market remains both exceptionally strong on the demand side, as signalled by the jobs numbers, but we also see that layoffs are increasing, leading to a rise in unemployment.
This is corroborated by the Challenger job cuts report for May, which shows layoffs somewhat on the high side, though by no means consistent with recession yet. Meanwhile, the JOLTS job vacancy report for April – also released this week – showed a rise in vacancies and an upward revision to previous months, suggesting a lower likelihood that excess demand for labour can be eliminated without a meaningful rise in the unemployment rate.
And that’s all for this week. Have a lovely weekend. GW
