French economy stalls as energy crisis and Ukraine war hit growth – business live

France’s sharp slowdown raises the spectre of stagflation in the eurozone, warns the FT:

The main drag on French growth was a fall in household spending, indicating that higher food and energy prices and the fallout from the Ukraine war are taking their toll on retail spending and consumer confidence.

Bloomberg says France unexpectedly stagnated as the Ukraine war took its toll:

France’s economy unexpectedly stagnated at the start of the year, sounding an early warning of the damage to Europe from soaring energy costs and worsening supply snarls following Russia’s invasion of Ukraine.

Europe’s near-term outlook is exceptionally uncertain. Another round of sanctions — including a possible ban on Russian oil imports — risks hammering industry, while record inflation and plummeting confidence are jeopardizing consumer demand.

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

France’s economy has unexpectedly ground to a halt as the energy crisis, inflation and supply chain problems exacerbated by the Ukraine war hit growth.

French GDP was unchanged in the first quarter of this year, weaker than the 0.3% growth expected by economists, official data released this morning shows.

After growing 0.8% in October-December, France’s growth fizzled out in January-March, statistics body INSEE reports.

It’s a sign of the economic damage being caused by soaring energy and commodity prices, and supply chain disruption from the Ukraine war.

Household spending contracted by 1.3%, a signal that the surge in inflation is hitting domestic budgets and confidence, despite France’s €25bn package of support for energy bills.

We find out at 10am how the wider eurozone fared in the first quarter, with growth figures from Germany, Spain and Italy all expected this morning too.

France’s slowdown will increase concerns over the health of the world economy.

Yesterday we learned America’s economy shrank unexpectedly in the first quarter of the year, contracting by -0.4% in the first quarter, or -1.4% on an annualized basis.

That was the US’s weakest quarter since the early days of the pandemic, as the widening US trade deficit pulled down GDP.

Supply chain problems, and ongoing pandemic disruption, is continuing to hit the companies. Last night, Apple warned that chip shortages and factory shutdowns in China could cost it up to $8bn of revenue this quarter.

It’s another sign that the world economy is slowing. America’s economy shrank unexpectedly in the first quarter of the year, contracting by -0.4% in the first quarter, or -1.4% on an annualized basis.

That was the US’s weakest quarter since the early days of the pandemic, as the widening US trade deficit pulled down GDP.

Supply chain problems, and ongoing pandemic disruption, is continuing to hit the companies. Last night, Apple warned that chip shortages and factory shutdowns in China could cost it up to $8bn of revenue this quarter.

We get the full eurozone growth report at 10am, along with new inflation figures.

Elsewhere, Russia’s central bank may cut interest rates today, possibly from 17% to 15%, as it continues to wind back February’s emergency doubling of borrowing costs (to 20%) to prop up the rouble after the Ukraine invasion.

The agenda

• 10am BST: Eurozone growth report for Q1 2022
• 10am BST: Eurozone inflation report for April
• 11.30am BST: Bank of Russia sets interest rates
• 1pm BST: Bank of Russia press conference
• 1.30pm BST: US Personal Consumption Expenditures measure of inflation