French household sentiment worsened significantly in April with this being the lowest reading since May 2023. Of note, households’ opinion regarding their personal financial situation, both past and future, has clearly deteriorated. The index on the future financial situation fell to -20, marking its lowest estimate since March 2023.
Inflation worries are evidently the biggest concern with opinion on future inflation jumping significantly to its highest since April 2022. In other words, it reignites the fears that were last seen back during the energy price surge from the Russia-Ukraine conflict. At the same time, unemployment fears also increased markedly to its highest since June last year.
In due time, this kind of dour sentiment will lead to a bigger drag on domestic demand conditions. That especially if the US-Iran conflict continues to drag on and higher energy prices become more embedded into the overall price pressures.