Moody's Holds France at Aa3 as UK Budget and Canada Tariff Changes Loom

Moody's kept France's rating at Aa3 with a negative outlook, against expectations of a downgrade. The UK Budget is due on 28 October, US tariffs on some Canadian goods are being eased, and oil is near a conflict-era high.

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Ratings and public finances in France

Moody's left France's sovereign rating at Aa3 on Friday, keeping a negative outlook, even though many observers had expected a downgrade, according to Le Figaro and Le Monde. Le Monde notes that the decision sets Moody's apart from the assessment of S&P and Fitch. Prime Minister Sébastien Lecornu welcomed the outcome as a signal in favour of his 2027 budget plan (Le Figaro).

On the budget front, French deputies rejected the revenue section of the social security financing bill, although the text's path is not over and the government still hopes to find a way forward (Le Monde). Le Figaro also reports that the government is considering raising the minimum wage from 1 November, a scenario employers fear (Le Figaro).

UK Budget approaches

Chancellor John Healey will present the Budget on 28 October (BBC). He has pledged to commit hundreds of millions of pounds to a "distinctively British" approach to artificial intelligence (The Guardian), including £100m for an AI biosecurity lab (BBC). Earlier this week the BBC reported that UK inflation rose to 3.5% in the year to September from 3.1%, with inflation and borrowing at their highest in a year, which frames the chancellor's task (BBC). Investing.com, citing Bloomberg, says the Budget will prioritise bond markets amid tensions within Labour (Investing.com).

Separately, the government plans an unprecedented intervention in the next water price review, asking companies to focus on value for money (The Guardian).

Trade, energy and markets

The White House will ease tariffs on some Canadian goods from 30 October while placing them on others, such as carpets (BBC). The Guardian links the move to Republican Senator Susan Collins's tight re-election race in Maine, with exemptions covering nine agricultural products (The Guardian).

MarketWatch says oil has climbed back to an Iran-war high and could rise further if the U.S. and Israel strike Iran after their respective elections (MarketWatch). Le Monde reports that Nigeria's Dangote refinery is listing on the stock exchange, helped by higher fuel prices, with the offer closing on 27 October (Le Monde). Meanwhile, MarketWatch notes that traders with bullish bets on chip stocks have been hit this month amid renewed doubts about returns on AI spending (MarketWatch).

Corporate and AI themes

Barclays is cutting 5,000 jobs, about 5% of its workforce, as it relies more on AI (BBC). In the United States, Meta agreed a deal that would help Mark Zuckerberg pay a possible California billionaire tax, which would be a 5% one-off levy put to a vote on 3 November, without losing control of the company (BBC, BFM Business, Le Figaro).

Central banks

The ECB published its Consumer Expectations Survey results for September 2026 (ECB); the feed gives no further detail. The Federal Reserve's latest releases are routine, including the minutes of its 15-16 September meeting (Federal Reserve).

Sources