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Last Updated: Friday, 9 December 2005, 14:45 GMT
French output has surprise tumble
Car production line
The economy has been hit by shocks like oil price rises
France's economy is under fresh scrutiny after industrial production unexpectedly fell in October.

Output dropped by 2.5%, after rising by 0.6% in September, the statistical office INSEE reported.

While the government has promised to revive the flagging economy, a mixed picture has emerged in recent months.

Despite the good intentions recent riots have dented consumer confidence, unemployment is still above 9% and reforms are proving difficult to enact.

'Several signs'

France is not alone, however, and many other European nations also are struggling to come to terms with issues such as competition from Asia and record oil prices.

Italy's economy is creaking, Germany's recovery is proving sluggish and the UK earlier this week had to cut its economic forecasts by half.

In an interview with French newspaper Les Echos, the European Union's (EU) Economic and Monetary Affairs Commissioner Joaquin Almunia said that while a recovery in the euro-zone was taking hold, it was still early days.

"Several signs show that the recovery is real," Mr Almunia told the paper. "Not yet lasting, but real."

He warned that most of the threats to continuing growth were external shocks, such as surging oil prices and a deterioration of the US economy.

"One cannot rule out a new rise in oil prices or the fact that imbalances in the global economy might not be resolved through coordination and dialogue," he said.

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