Bank of France cuts second-quarter growth forceast to -0.1pc The news from France and Germany unsettled European markets further, less than 24 hours after Fitch slashed Spain's credit rating by three notches to BBB from A. Shortly after opening, the FTSE 100 fell 0.5pc, the French CAC lost 0.9pc, the German DAX dropped 0.7pc, the Spanish IBEX shed 1pc and the Italian MIB fell 0.9pc. Spanish 10-year bond yields initially jumped 17 basis points before falling back to just over the 6pc "danger level." The French growth outlook will be a blow to new French President Francois Hollande as he continues to battle German Chancellor Angela Merkel over how to resolve the European debt crisis. On May 15, the official statistics agency INSEE said the French economy had stalled in the first quarter of 2012. In addition to recording zero growth in the first three months of the year, INSEE revised its fourth-quarter 2011 growth figure down to 0.1pc from 0.2pc, but maintained that output had expanded by 1.7pc in 2011. Meanwhile, French unemployment continued to rise in the first quarter of 2012, hitting the symbolic level of 10pc, up by 2pc from the previous three-month period INSEE said Thursday. The rate, based on International Labour Organization standards, was also up 0.4pc from the first quarter of 2011. The European Commission has forecast overall growth this year of 0.5pc in France, in line with budget predictions by the new French President Francois Hollande. But the Commission expects growth next year of only 1.3pc, against a forecast of 1.7pc under Hollande's economic programme.