France's industrial production unexpectedly declined in August, and the decline in electricity demand offset a slight increase in the manufacturing industry. Industrial production in France fell 0.3% month-on-month in August, mainly reflecting a decline in electricity generation compared to July. Industrial production in France hit the highest level since 2021 in July, and economists had predicted a slight increase in industrial production in August. This decline offset the 0.3% month-on-month increase in manufacturing output. The data highlights that the Eurozone's second-largest economy is struggling to resume economic growth. France narrowly avoided falling into recession in the first half of this year, and now it is facing new resistance. The market is worried about whether the minority government can contain the widening fiscal deficit. Economic and fiscal challenges have intensified the sell-off in the bond market, causing France's borrowing costs relative to other countries to rise to the highest level since the Eurozone debt crisis.

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