French business climate brightens a little more as rebound extends into July

France’s July business confidence reading improved to 97 from a revised 95, beating expectations and marking a four-month high. The rise suggests the rebound in business sentiment that began in June is continuing, with gains across manufacturing, services, and retail offsetting weaker wholesale sentiment. The index is now moving closer to its long-term average of 100, though it has not reached that level since May 2024. For markets, the data is mildly supportive for French and broader European growth expectations, but the report also flags upside risks from rising energy prices, potential Middle East conflict spillovers, and Red Sea shipping disruptions, which could pressure activity and inflation ahead.