French economy clocks zero growth

In a further sign that the European economy was stumbling, Europe's second largest economy, France registered no growth in the last quarter as households across the country cut back on spending.

Eurostat, the region's statistics body released data that showed, the French GDP was stagnant between April and June though economists a 0.3 per cent growth. 

Stock markets across Europe were lower at the start of trading on the disappointing data, with the FTSE 100 down 40 points to 5122. France's CAC 40 fell to 1.9 per cent at 3030.48.

Household consumption in France, the world's fifth largest economy, fell by 0.7 per cent against the first three months of 2011, adding to the  pressure on president Nicolas Sarkozy to convince financial markets that he could meet his fiscal targets.

President Nicholas Sarkozy had promised the release of revised plans for slashing France's budget deficit within days.

According to French finance minister François Baroin the French government had no plans for changing its targets of GDP growth on the back of a single quarter's data. He also pointed out that France's economy had grown by 0.9 per cent in the first three months of 2011.