France may be sliding back into recession after activity in its key manufacturing and services industries shrank for the second month running in December.
French GDP shrank by 0.1% in the three months to the end of September and a second quarter of decline would put it technically in recession.
The latest purchasing managers' index (PMI) figures revealed the rate of decline has accelerated, falling to 45.3 - down from 48.0 the previous month.Official figures showed output fell by 0.1 per cent between July and September - leaving the country on the brink of another recession.
The performance in the rest of the eurozone was little better with output in the single currency bloc growing by just 0.1pc in the third quarter down from 0.3pc in the previous three months.
France will raise its headline VAT rate from 19.6% to 20% on 1 January to protests from retailers and consumer groups. The small rise is seen as an attack on living standards already battered by four years of faltering recovery from the banking crash.
written by Nicolas Yang
