Moody's Holds France at Aa3 as UK Budget and Fuel Prices Draw Focus

Moody's kept France's rating at Aa3 with a negative outlook, while Paris weighs purchasing-power measures and the UK prepares its Budget. Tariff changes on Canadian goods also feature.

Maz Vantage ·

France: Moody's holds the rating

Moody's left France's sovereign rating at Aa3 on Friday, with a negative outlook. Many economists had expected a downgrade, and Le Figaro reports that most observers had anticipated a move to A1 given the government's failure to repair public finances (Le Figaro). Prime Minister Sébastien Lecornu said the decision "defies the declinist forecasts", and presented it as a signal in favour of his 2027 budget plan (Le Monde, Le Figaro). Le Monde notes the decision differs from the assessment of French solvency by S&P and Fitch (Le Monde).

France: purchasing power and fuel prices

Economy minister Roland Lescure said that bringing forward a minimum wage (Smic) increase before 1 January is "part of the debates", as the government looks for answers to purchasing-power concerns behind the recent protests (Le Figaro). Separately, a decree has been published to release strategic diesel stocks. Distributors must pass the full price cut on to customers, possibly from 1 November, and the government hopes for a fall of 12 to 18 cents per litre (Le Monde). On air fares, BFM Business relays a warning from Ryanair's chief executive Michael O'Leary that tickets in Europe could rise 10% to 20% next year, citing higher jet fuel prices among other factors (BFM Business).

United Kingdom: Budget preview

Ahead of Wednesday's Budget, BBC Verify looks at options for Chancellor John Healey to raise money without increasing income tax, as he may need to boost fiscal headroom (BBC). The Budget is also expected to include £1bn for social and affordable housing, taking funding for the 10-year programme above £40bn (BBC), £100m for an AI biosecurity lab (BBC), and a devolution package for English local leaders (The Guardian). In banking, Nationwide is cutting another 275 jobs in its latest round since taking over Virgin Money (The Guardian).

Trade, central banks and markets

The White House will ease tariffs on some Canadian goods from 30 October, including certain machinery, while imposing them on others such as carpets (BBC). The ECB published its Consumer Expectations Survey results for September 2026 on 23 October (ECB); the headline figures were not available in the feed summary. The latest Federal Reserve release in the feed is the minutes of the 15-16 September FOMC meeting, published on 7 October (Federal Reserve). Investing.com describes Bitcoin recovering to about $80,800 ahead of a Fed meeting (Investing.com).

Sources