France saw its sovereign credit status lowered on Sept. 18 as investors grew concerned about the government's ability to manage its debts. Scope reduced the grade from AA- to A+, while a measure of bond risk rose to 1 percentage point and French 10 year yields hit 4.56%, the highest level since 2008. Prime Minister Lecornu warned that the 2027 budget deficit could exceed 6.5% of GDP without corrective measures and that rising interest rates will add €10 billion to debt servicing costs.

The French government is planning a budgetary effort of about €54 billion for 2027 to mitigate fiscal slippage. France has maintained lower government yields than the U.S. since 2013 despite current real GDP growth of 0.9% and a sovereign rating below the U.S. grade of AA+. The French-German 10 year yield spread also widened to 100 basis points for the first time since 2012.