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Last Updated: Wednesday, 22 February 2006, 11:07 GMT
Export hopes lift French morale
French butcher shows meat to a customer
French consumers are continuing to spend
French business confidence rose by more than expected in February, lifted by an increase in foreign orders.

Statistical office Insee's key monthly index of business sentiment climbed to 105 during the month, up from January's figure of 103.

The data will ease concerns that French companies are failing to cash in on improved growth in the global economy.

Separate figures also revealed that French households spent more than had been expected last month.

Household spending rose by 0.9% month-on-month in January - and by 2.5% compared with the same time in 2005 - as demand for textiles and leather goods jumped, Insee reported.

Analysts had forecast a month-on-month increase of 0.7% for the eurozone's second-biggest economy.

'Quite impressive'

The latest French business confidence report showed a sharp rise in "foreign orders and demand" for February compared with the previous month.

"This could be a sign that exports might be performing better this year. It goes in the right direction," said HSBC France economist Nicolas Claquin.

Societe Generale economist Olivier Gasnier added: "The rise in the business climate is quite impressive and is explained by the improvement in foreign orders."

The upbeat figures follow data from Germany indicating that business sentiment there reached a six-year high in January.

Germany and France jointly account for about half of the 12-nation eurozone's output.

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