French May consumer confidence tumbles

For a fifth consecutive month, consumer confidence in France has now fallen to a record low in May.

As is the case in the UK, the rising costs of fuel and food has stirred action and fishermen have increased their week-long blockade of ports to the English Channel, as UK hauliers are demonstrating against the cost of diesel calling for a rebate from the government in order to help save their business.

INSEE, the French national statistics office, revealed that consumer sentiment fell to minus 41, even though analysts predicted that it would stay at minus 37.

The greatest threat to households now is inflation, as consumers have felt the hike in prices over the past weeks, and with consumer spending down, the downward spiral is likely to continue.

In a bid to ease the tension, President Nicolas Sarkozy outlined tax breaks for companies that introduce or raise annual bonuses in order to share profits.

He has also outlined a plan to raise a rebate on heating fuel for impoverished households by 50 euros, in order to assist those who are suffering most.

France’s inflation rate fell to 3.4 percent in April after reaching 3.5 percent in March but it is still hovering around it highest levels in over 12 years.

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