The action, which will put pressure on the nation’s borrowing costs, reflects doubt that a new government can mend the deteriorating financial situation.

Political fragmentation” in Paris means there is a “very low probability” of reducing the ballooning fiscal deficit, ratings agency says.

Moody’s downgraded France’s credit rating on Saturday, saying that it expects the country’s incoming government to struggle to tackle its deficit. In an unscheduled announcement early on Saturday morning,

French bonds and stocks lagged peers after Moody’s Ratings cut the country’s credit rating, putting more pressure on officials after far-right leader Marine Le Pen toppled the previous prime minister over a budget dispute.

The spread between French and German benchmark bond yields widened, signaling investor unease about France's public finances. France has endured a monthslong political crisis, driving up the premium investors demand for holding French bonds.

The yield on 10-year French debt rose to more than 3%, on the first trading day after the credit rating agency unexpectedly cut France's debt rating. View on euronews