French consumer confidence soft in January

French consumer confidence was steady in January to confound expectations for a rise and dealing a blow to hopes for a pick-up…

French consumer confidence was steady in January to confound expectations for a rise and dealing a blow to hopes for a pick-up in the euro zone's second biggest economy.

State statistics office INSEE said its consumer morale index was unchanged at minus 25 from the same level in December, when it dropped to a year-low.

The soft readout contrasted with signs of growing confidence among consumers in neighbouring Germany, the biggest euro zone economy, but chimed with an INSEE survey released on Friday that showed French business sentiment held steady in January.

The news will make disappointing reading for France's conservative government as it seeks to foster economic growth to help cut stubbornly high unemployment of close to 10 per cent, and to help reduce a bloated public sector deficit.

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Consumer spending is traditionally the main driver of growth in France.

The country's exporters are having to cope with the fall of the dollar against the euro, which makes their goods more expensive outside the single European currency zone.

The French government has forecast growth of some 2.5 per cent this year but economists say this is over-optimistic as high unemployment is dampening consumer spending and the euro's strength is hurting businesses.