Euro is down against the pound this morning, but the overall trend is still of strength, after hitting a six-month high on Tuesday.
Economists are warning of a ‘Japanification’ effect on the eurozone, whereby a deflationary cycle could lead to very long-term low growth and low inflation, especially in countries like Spain and Greece.
Construction figures came in at 2.0%, slightly lower than the expected 2.4%. Germany’s construction output slowed by almost 5%, while France and the Netherlands both saw a recovery. Meanwhile, year-on-year inflation figures came in slightly higher, at 1.3 over 1.2
Martin Selmayr, the European Commission’s Secretary-General, criticised Britain’s Brexit preparations, saying the EU doesn’t ‘see the same level of preparation’ from the UK for a no-deal. He claimed ‘we could live with a hard Brexit, and we don’t think the same level of preparation is there on the UK side. No deal is something that we don’t like – nobody can like a no deal – but if you want to avoid it you have to be perfectly prepared for that. The EU is perfectly prepared for no deal.’
