French Assembly Reignites Pension Row

Despite the French government being in a state of limbo following the recent legislative elections delivering a hung parliament, Macron is facing renewed calls from the left to overturn his Pension reform.

Last year, Macron took the decision to enact special constitutional powers to increase the state pension age to 64, with the move acting as the catalyst for widespread rioting and demonstrations across the country.

Yesterday, the far-left party France Unbowed announced that it would commence steps to repeal Macron’s decision and decrease the state pension age from 64 to 62.

On the other side of the political spectrum, National Rally also said that they would support the measures, indictive of how Macron’s Renaissance party is facing mounting pressures from both sides of the Assembly.

Here, one France Unbowed legislature said that “There was already a majority in the previous parliament to beat retirement at 64, I think there will be an even greater majority to beat it today”. Macron however cites France’s high public deficit as a key reason for increasing the state pension age, and France Unbowed’s bill will not be able to be debated in the National Assembly given that the house is in recess.

It’s worth noting that across the Continent, state pension ages vary considerably. For example, state pensions can be received at 62 for those in Malta and at 58 and 60 for some women in Czech Republic and Austria, respectively (though the Austrian retirement age for women is to be made equal to that of men (65) by 2033).

Meanwhile, Denmark, Greece, Italy, Norway and Iceland have the highest age at 67, with many of these countries already announcing further increases.

In the UK, the government plans to increase the state pension age to 67 by 2028 ahead of increasing it further to 68 by 2046. Some experts however warn that it will need to hit 69 by 2041 in order for the system to support its own immense weight.

Increasing the state pension age is the topic of considerable debate in Germany. For example, in 2022, the president of the Confederation of German Employers’ Association told said that “for every 100 contributors, there are currently about 50 pensioners; in 15 years, there will be 100 contributors for every 70 pensioners. This means that the financing of our pension system is on the verge of collapse”.

Since then, the German government have announced that they will increase the retirement age by two months each year, until 2031.

Yesterday, data from the US revealed that existing home sales fell at their fastest monthly decline since 2022. With 3.89 million units being sold across the US, home sales shrank 5.4% on the month in a signal that the US housing market may be slowing. That said, average prices rose, with the median house price appreciating to a record high of $426,900, following two consecutive months of rises.

Sticking with the US housing market, the Mortgage Bankers Association reported that the average rate for 30-year fixed-rate mortgage fell from 7% to 6.87%. This marks the largest weekly fall in mortgage rates over the last four months and is a sizable move away from the recent peak of 7.9% recorded in October 2023.

Yesterday, the Central Bank of the Republic of Turkey kept their benchmark interest rate unchanged at 50% for the fourth consecutive time. The latest interest rate decision comes as inflation fell by three percentage points to 72% over the month of June – the first fall in inflation since the final quarter of last year.

Despite the fall in inflation, Policy makers noted that “Leading indicators indicate that monthly inflation will temporarily increase in July as a result of administered price and tax adjustments, which are relatively outside the scope of monetary policy”.