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Deflation fears among businesses reaches an historical high in France – ING

FXStreet (Barcelona) - The ING Bank Research Team note that business confidence figures published yesterday showed that businesses fear for a dent in their pricing power due to deflation.

Key Quotes

“Business confidence figures published yesterday in France showed that businesses are fearing that deflation could dent their pricing power. However, their appreciation of the general outlook showed some improvement in confidence in November, but nothing likely to drive France out of stagnation.”

“In France, the main business confidence index rose in November from 97.5 to 98.7, its highest level in six months. The appreciation of the general outlook mainly drove business sentiment up, with the talks about European investment plans and ECB intervention being certain optimism drivers.”

“Overall, this confidence survey continues to point to weaknesses in the private sector. In particular, the price outlook became very depressing again in November, showing that fear of deflation is denting companies’ pricing powers: this component of the survey reached in November its lowest level of the past ten years”

France Consumer Confidence came in at 87, above forecasts (86) in November

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