French consumer spending took its sharpest dive in nearly four years in May as fears of rising unemployment and a spate of strikes in the euro zone's second largest economy spooked shoppers.
National statistics office INSEE said this morning that spending slumped 1.6 per cent last month, led down by a 3.7 per cent tumble in car purchases and strong falls in clothing and durable goods.
The headline fall was the worst since a 1.7 per cent decline in August 1999 and outdid the most downbeat analyst forecasts.
It came as French stores kicked off their summer sales with even deeper discounts than usual and the promise of free foot massages and chocolates to tempt shoppers through their doors.
Despite government assurances that low interest rates and the end of the Iraq war mean an upturn is around the corner, France's economy has shown little sign of spark and speculation is mounting that official growth forecasts will be cut again.