European markets closed higher on Thursday after a volatile week marked by political tension in France, new data from the UK showing modest economic growth, and a sweeping restructuring announcement from Nestlé.
Gains across major bourses were broad-based, led by food and beverage stocks, which surged following Nestlé’s sharp rebound.
Stoxx 600 climbs as Nestlé rally boosts sector
The pan-European Stoxx 600 index rose around 0.6%, extending Wednesday’s gains and reversing earlier losses seen earlier in the week.
Major national indices were all in positive territory, with France’s CAC 40 advancing 1.4%, Germany’s DAX up 0.4%, and the UK’s FTSE 100 adding 0.1%.
The French benchmark outperformed after Prime Minister Sebastien Lecornu’s government survived two no-confidence votes, alleviating immediate political uncertainty.
Meanwhile, the Stoxx Food & Beverage index jumped over 4% as Nestlé’s shares surged 9.3% after announcing large-scale job cuts aimed at improving operational efficiency.
The Vevey-based consumer goods giant said it would cut 12,000 white-collar positions and a further 4,000 jobs over the next two years, as new CEO Philipp Navratil moves to simplify operations and automate processes.
“We are transforming how we work,” Navratil wrote in a LinkedIn post, pledging to “accelerate execution and drive the value creation plan with intensity.”
Nestlé shares, which have fallen 9% over the past year and are down more than 40% from their December 2021 peak, rallied strongly on the announcement.
The company’s restructuring comes just weeks after former CEO Freixe was ousted over an undisclosed personal relationship.
Navratil, formerly head of Nespresso, has vowed to “fully embrace the company’s strategic direction.”
The company’s turnaround plans and sector-wide optimism helped lift European luxury and consumer goods stocks, which had already rebounded earlier in the week on signs of recovering demand in China.
Lecornu survives no-confidence votes
Prime Minister Sebastien Lecornu narrowly survived two no-confidence votes on Thursday, securing a reprieve for France’s fragile government and clearing the path to present a 2026 budget.
The victory came at a steep political cost.
Earlier this week, Lecornu agreed to suspend President Emmanuel Macron’s controversial 2023 pension reform — a move aimed at winning support from the Socialist Party.
The decision is said to have drawn criticism within Macron’s camp, as it effectively sacrifices one of the president’s main economic achievements midway through his second and final term.
Had Lecornu lost either vote, his government would have been forced to resign, likely triggering calls for Macron to dissolve parliament and call fresh elections — a scenario that could have deepened France’s ongoing political crisis.
While Thursday’s outcome steadied the government for now, it underscored the vulnerability of Macron’s administration amid widening fiscal strains and fractured parliamentary alliances.
UK GDP expands slightly in August
The UK economy grew by 0.1% in August compared with July, according to data released by the Office for National Statistics (ONS) on Thursday.
The figure offered a modest boost to Chancellor Rachel Reeves ahead of her November 26 budget, though underlying economic pressures remain.
Revised data showed that GDP had actually contracted 0.1% in July, overturning earlier estimates of flat growth.
The ONS said output in the three months to August rose 0.3%, slightly above the 0.2% growth in the three months to July, driven primarily by activity in public health services.
Consumer-facing sectors, however, continued to shrink.
The International Monetary Fund this week projected that the UK will record the second-fastest growth among G7 nations in 2025, behind only the United States.
However, with annual expansion expected at just 1.3%, analysts say the pace will be insufficient to avert new tax increases or spending cuts in Reeves’ upcoming fiscal plan.
The Bank of England, which held interest rates at 4% in September, continues to balance the challenge of taming inflation without stifling already fragile growth.
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