French Debt: Rising Rates Threaten Households and Businesses

France's ten-year borrowing rate exceeded 5% on Wednesday, a level unseen since 2002, raising concerns about negative impacts on households, businesses, and banks. The rise is expected to push mortgage rates above 4% by early 2027, from current levels of 3.2% to 3.5%, potentially killing the housing market recovery and pricing out modest households first. Consumer credit rates could climb to 7% or 7.5%, while banks holding state debt face losses and may raise lending rates. Economists warn that higher borrowing costs will hurt corporate investment and keep bankruptcies high, while the new home construction sector, already in crisis for four years, would suffer further.