France gets a breather as Moody's refrains from downgrading its credit rating.

France has escaped a downgrade after Moodys left its credit rating unchanged, offering respite to a country grappling with soaring bond yields, political deadlock and street protests. Moodys kept Europes second-largest economy at Aa3 seven notches above junk and on a par with the UK with a negative outlook. Slower growth and higher deficits have left Frances debt burden slightly higher than we previously expected, Moodys said. Bond yields have risen faster than we expected, alongside widespread social protests that could constrain fiscal consolidation efforts. Moodys decision comes ahead of another tense weekend in France, where authorities are trying to avert a repeat of the large-scale unrest that caused severe damage in several cities. France still has not found a way to curb its ballooning debt burden, which has made it the focus of bond market anxiety in recent weeks. The yield on French debt has risen more than any other advanced economy this month and reached its highest level in 24 years. Debt is mounting, with this years fiscal deficit forecast to widen to the equivalent of 5.4 per cent of economic output. Political gridlock, low growth and rising interest costs have stymied efforts at fiscal consolidation.