France Posts Surprise Q3 Contraction as Consumer Spending Slumps Again

France's economy shrank in the third quarter of 2026, with preliminary data showing GDP falling 0.1% quarter-on-quarter against a consensus forecast of 0.1% growth. On a year-over-year basis, output declined 0.1%, a sharp reversal from the 0.5% annual growth recorded in the prior period and well below the 0.3% expansion economists had expected.

Consumer spending, a key engine of French growth, remained under pressure in September. Monthly household consumption fell 0.5%, matching August's decline and missing the 0.1% gain forecast. Year-over-year, consumer spending dropped 0.4% compared with a 0.8% rise the previous year and a consensus expectation of 0.4% growth, underscoring the breadth of the demand weakness.

Separately, the Bank of Japan held its benchmark interest rate steady at 1.25% at its October meeting, in line with forecasts and unchanged from its previous setting, signaling no shift in its cautious monetary policy stance.