French HCOB Services PMI Final (Jan) 48.4 vs. Exp. 47.9 (Prev. 50.1)

• “Labour market prospects in the French service sector appear to be broadly balanced. Survey data have pointed to a modest recovery in hiring throughout the second half of 2025, though simultaneous reports of diminishing work backlogs suggest this trend could be a fragile one."
• “Price dynamics in the French services sector remain modest for the time being. Where feasible, firms are attempting to pass higher costs, which are predominantly wage‑related, on to customers in an effort to preserve margins."

The final France HCOB Services PMI came in at 48.4, beating expectations of 47.9 but still declining from the previous month's 50.1, indicating contraction in the sector. This mixed signal suggests that while hiring may improve modestly, the underlying demand remains weak, potentially complicating recovery prospects and influencing ECB policy on rates.