France’s ten-year borrowing rate has reached 4.10%, its highest level since November 2008, signaling growing market distrust of French debt. The OAT-Bund spread oscillates between 74 and 79 basis points, a high range reflecting investor concerns over France’s budgetary tensions. Rating agency Fitch is due to deliver its decision on France’s sovereign rating on August 28, against a backdrop where debt servicing costs are set to rise by 12.3 billion euros in 2027. A downgrade by Fitch would send an additional negative signal and could trigger mechanical reduction of certain funds’ exposure to French debt. This rise in long-term rates increases the cost of mortgages, local authority financing, and French banks’ refinancing expenses.
Source: Read the original article
