French markets wobble as Bayrou’s confidence vote spooks business and investors

Mace | 27th August 2025 | Brussels, Politics
KANANASKIS, CANADA - JUNE 16: France's President Emmanuel Macron attends a bilateral meeting with British Prime Minister Keir Starmer at the G7 Leaders' Summit on June 16, 2025 in Kananaskis, Canada. Keir Starmer is attending his first G7 leaders' summit, where issues on the table for discussion are the escalating conflict in the Middle East, as well as the failure to bring peace to Ukraine. (Photo by Suzanne Plunkett-Pool/Getty Images)
KANANASKIS, CANADA - JUNE 16: France's President Emmanuel Macron attends a bilateral meeting with British Prime Minister Keir Starmer at the G7 Leaders' Summit on June 16, 2025 in Kananaskis, Canada. Keir Starmer is attending his first G7 leaders' summit, where issues on the table for discussion are the escalating conflict in the Middle East, as well as the failure to bring peace to Ukraine. (Photo by Suzanne Plunkett-Pool/Getty Images)

French business leaders warn of economic damage after Prime Minister François Bayrou set a 8 September confidence vote linked to budget plans. Stocks fell and bond spreads widened as opposition parties refused support. Markets partially stabilised, but sentiment remains fragile ahead of the vote and any budget revisions.

French business leaders warn of economic risk as Bayrou’s confidence vote jolts markets French business leaders are warning about economic fallout from the prime minister’s decision to call a confidence vote, with fears of recession resurfacing as investors react to the latest bout of political uncertainty in Paris. Market gauges and credit spreads moved sharply as the prospect of government collapse returned to the fore. Prime Minister François Bayrou has slated a confidence vote for 8 September tied to his budget plans. France’s minority administration lacks a stable majority and three opposition blocs have said they will not back the government. Polling points to pressure for fresh elections if the cabinet falls. Equities and bonds sold off after the announcement. The CAC 40 dropped to a three week low before a modest rebound, while banking stocks remained weak. The risk premium on French debt widened as investors adjusted positions in response to the political timetable and uncerta...

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