France’s borrowing costs hit 5% for first time since 2002

{"text":[[{"start":9.8,"text":"France’s long-term borrowing costs have hit 5 per cent, a benchmark last reached in 2002, as investors grow increasingly concerned about the stability of the country’s politics and the state of its public finances."}],[{"start":22.88,"text":"A fresh bout of selling on Wednesday pushed French 10-year bond yields up as much as 0.08 percentage points to reach the 5 per cent threshold, taking the jump so far this week to more than 0.2 percentage points."}],[{"start":36.48,"text":"The moves come after days of unrest and political recriminations in the country, as peaceful demonstrations over the cost of living and education spiralled into widespread rioting and looting."}],[{"start":48,"text":"France’s borrowing costs have surged from 3.2 per cent in late February, having been the hardest hit in a sweeping sell-off in G7 bond markets, as the Iran war has stoked inflation and put economies with large debt piles and wide budget deficits under particular pressure. Bond yields rise as prices fall."}],[{"start":67.04,"text":"“The political willingness for any fiscal consolidation ahead of the election is very, very low,” said Jeff Mueller, co-head of fixed income at Morgan Stanley Investment Management, adding there was plenty of room for “the situation to worsen from here”."}],[{"start":null,"text":"

"}],[{"start":81.2,"text":"The closely watched gap, or spread, between French 10-year borrowing costs and Germany’s rose near to 1.6 percentage points on Wednesday, matching the intraday high reached in volatile trading earlier this month."}],[{"start":93.98,"text":"Such a level had previously not been seen since the Eurozone debt crisis more than a decade ago."}],[{"start":99.36,"text":"“The political situation is pretty adverse and [it is] difficult to see that improving anytime soon,” said John Stopford, head of multi-asset income at asset manager Ninety One."}],[{"start":109.16,"text":"The “path of least resistance”, Stopford added, was for a wider French spread heading towards April’s presidential election, arguing the European Central Bank would be unlikely to step in without a significant deterioration from current levels."}],[{"start":123.12,"text":"Moody’s will issue a ratings decision on France on Friday, with a downgrade a real possibility given the outlook is already negative on the current rating of Aa3."}],[{"start":137.44,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792577780_1110.mp3"}