http://www.guardian.co.uk/business/feedarticle/10531184
PARIS (Reuters) - France's economy unexpectedly grew in the third quarter as households splashed out on clothing and trade data turned positive, though high unemployment and rising taxes make for a gloomy outlook.
Preliminary data showing the economy expanded 0.2 percent on a seasonally adjusted quarterly basis confounded fears that France might slip into recession by year-end.
There was further good news as investors piled into a French government bond auction on Thursday, sending two-year yields to a record low as they sought a safe alternative to ultra-low returns on German debt.
Economists cautioned though that with unemployment running at a 13-year high and 30 billion euros (23.98 billion pounds) in additional taxes on households and businesses set to kick in next year, the bounce in the euro zone's second-biggest economy was unlikely to be maintained.
"A positive figure for the third quarter does not mean the crisis is over," said Philippe Waechter of Natixis Asset Management. "Private demand - both consumption and capital investment - are still very low. There's no momentum."
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