Macron will nominate new French prime minister in 48 hours

Sébastien Lecornu, the outgoing prime minister, said MPs recognise the pressing need to pass a budget by the end of the year.

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Earlier on Wednesday, outgoing Prime Minister Sébastien Lecornu said the possibility of dissolving parliament was beginning to fade following talks with political parties over the last two days.

"There is a majority in parliament and that is the majority that is keen to avoid fresh elections," he said.

On Monday, Lecornu - a close ally of Macron - became the third French PM to leave his job in less than a year, driven out by a hung parliament deeply divided along ideological lines.

He was then asked by Macron to stay on for two days to form a consensus among parties on how to get out of the current political crisis.