Economies across the eurozone have been struggling for a while now and yesterday provided further evidence of its fall from grace, with Italy falling into recession once more. It is the third time in ten years that there has been a recession in Italy and it will be of some concern to countries across Europe. In the fourth quarter of 2018, Italy’s economy shrank by 0.3% which was worse than expected and follows a 0.1% contraction in the third quarter of 2018, meaning that Italy is now officially in a technical recession.
The Italian prime minister, Giuseppe Conte, was firm in his belief that the economy would recover this year, saying “I’m not at all worried … Even the most naive analysts know that at this moment there is a trade war going on between the United States and China.” Conte went on to add, somewhat bizarrely, that it was Germany that was holding Italy back. While it is true that the eurozone’s largest economy has been struggling of late, we are yet to see GDP growth rate figures for the final three months of 2018.
We also saw UK house prices stagnate, with new figures from Nationwide showing that prices were only 0.1% higher in January 2019 from the same month a year previous. Last month, the figure was 0.5%, with the latest figures showing the lowest annual growth since February 2013. The disappointing readings are thought to be down to the economic uncertainty surrounding Brexit.
Speaking of which, a new survey has found than one in three UK firms are planning for a no-deal Brexit relocation. The Institute of Directors warned that 29% of companies in a survey of 1,200 members thought Brexit posed a significant risk to their UK operations and had either already moved parts of their business abroad, or were planning to do so. It brings into question claims by some Brexiters, that UK businesses are scaremongering over the effects of a no-deal Brexit.
If you’re concerned about the impact of a potential no-deal on the exchange rates – and there is a lot of volatility on the horizon – don’t hesitate to speak to your Personal Trader on 020 7898 0541 about how a forward contract lets you fix the same rate for up to twelve months.