Moody's Spares France a Downgrade, Cites Rising Yields and Social Unrest as Risks

06:03 PM EDT, 10/23/2026 (MT Newswires) -- Moody's Ratings kept France's credit rating at Aa3, seven levels above junk and on par with the UK, avoiding a downgrade for a country grappling with surging bond yields, political gridlock and street protests, Bloomberg reported Friday, citing a Moody's statement. The outlook remains negative. Moody's said slower growth and a higher deficit have pushed France's debt burden somewhat higher than previously expected, bond yields have risen more rapidly than anticipated, and widespread social protests could constrain efforts to reduce the deficit, the report said. Moody's said its baseline assumption is that a deficit-reducing 2027 budget will eventually be adopted, possibly by decree, according to the report. Bloomberg reported that France's National Assembly on Friday rejected the "receipts" portion of the 2027 social security budget bill, sending the original draft to the Senate. Prime Minister Sebastien Lecornu, who lacks a parliamentary majority, has proposed a finance bill aimed at cutting the deficit to 5% of economic output next year from 5.4% this year, according to the report.