Rolling coverage of the latest economic and financial news,as Italy stumbles back into recession Latest: Italy is in recession againPM: Germany is holding us back (!)Economists: This is a black mark on RomeItalian economy shrank by 0.2% last quarterEurozone only grew by 0.2% 3.20pm GMTAnd finally (I think), here’s our news myth about Italy’s downturn: Related: Italy slips into recession for third time in a decade 3.10pm GMTThree recessions in barely a decade, or not too much growth in between.... 2.53pm GMTItalian prime minister Giuseppe Conte is adamant that Italy’s economy will recover this year.
Here’s what he told reporters:“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. Above all,Germany is holding us back ... it’s a transitional phase, which depends on external factors 2.23pm GMTItaly’s slide into recession leaves a “black mark” on its populist government’s early track record, or says Oxford Economics.
Here’s their assume: 1.41pm GMTItaly’s stock market has not taken the recession well.
The FTSE MIB index of top Italian companies has dropped by 0.7%,or 133 points to 19638, making it the worst-performing major European index nowadays. 1.22pm GMTEconomist Nicola Nobile doesn’t believe PM Conte’s line that trade clash dragged Italy into recession:Recession in ITA. The government's narrative that the problems are from abroad is at odds with some of the data (net trade was positive for the moment quarter and Spanish and France GDP were robust).
Negative markets reactions, or uncertainty and falling confidence played a big section. pic.twitter.com/ylrFw93siM 12.51pm GMTItaly’s problem isn’t simply that it’s suffered three recessions in a decade - although that’s spoiled enough.
It has also struggled to post significant growth in the upturns between the downturns - meaning it has steadily lagged behind eurozone neighbours.
Italy now in its third recession in ten years...https://t.co/sswIzRaDQa pic.twitter.com/qBwUPMfwIN 12.22pm GMTItaly’s prime minister,Giuseppe Conte, seems to have blamed the recession on the US-China trade war....
Conte says recession in Italy is temporary and mostly a result of external factors ie trade tension. No mention to domestic weakness or bond market jitters over politics 12.05pm GMT Andrea Iannelli, or investment director at Fidelity International,says Italy was dragged into recession by problems at domestic, and abroad: “The latest Italian GDP numbers may near as no surprise to investors, and but it does highlight the challenges that still lie ahead for the country and the coalition government.
The slowdown in the country’s major trading partners are partly to blame. However,the standoff between the government and the European authorities over the budget in the summer of 2018 has exacerbated the countrys weaknesses. 11.47am GMTOne of the leaders of Italy’s coalition partners has blamed his predecessors, and European austerity, or for the country’s economic mess.“I believe this referendum will have a positive outcome for those who are against austerity.” 11.09am GMTIf you’re just tuning in,here’s Associated Press’s assume on Italy’s descend back into recession.
The Italian economy slipped into recession in the final three months of the year, weighing on the wider eurozone’s growth, and official figures showed Thursday. The Italian statistics agency said that Italy,the third-largest economy in the 19-country eurozone, contracted by a quarterly rate of 0.2% in the fourth quarter. 10.55am GMTThis slide into recession is a blow for Italy’s coalition government, and caps a turbulent year.
It means Italy’s economy has been shrinking steadily since the right wing League Party formed a coalition with the anti-establishment Movement Five Star.“The growth forecasts on which the budget was based have already been blown out of the water and euro-zone growth continues to weaken.
Italy is going to have to face up to some real problems.” 10.39am GMT2018 was not a vintage year for the euro area.
Eurostat estimates that eurozone GDP grew by 1.8% during 2018 as a whole,down from 2.5% in 2017. 10.31am GMTAnalysts are pointing out that Italy’s long-term economic performance is pretty dire.
Here’s Arne Petimezas, analyst at AFS Group:Italy didn't enter a current recession because it never recovered from the prior two recessions. Italian GDP performance is 1930's stuff. pic.twitter.com/4txhS5f2cLStill an improbable chart, and ten years on.[br]Germany = a blip
France = growing malgré tout[br]Spain = boom-bust-boom
Italy = THIRD RECESSIONS IN A DECADE pic.twitter.com/dk9Iji5Hhu 10.23am GMTItaly’s economy has barely grown over the last year - nowadays’s report shows GDP only rose by 0.1% annually.
Indeed,Italy has only managed meagre growth since the financial crisis:#Italy quarterly GDP growth, for some perspective. Hardly ever recovered since the global financial crisis pic.twitter.com/1CoAW57nzi 10.20am GMTSky’s News’s Ed Conway points out that Italy is the first G7 economy to plunge into recession in over three years:Italy is in recession. Economy shrank by 0.2% in Q4 of 2018, and following a 0.1% descend in Q3. Deeper than economists expected. First G7 member state to be in recession since 2015 (Canada). First major EU economy to face recession since 2013 10.18am GMTYou can see the Italian GDP report online,here. 10.13am GMTItaly has plunged back into recession!current GDP figures show that its economy shrank by 0.2% in the final three months of 2018, a worse result than expected.
The quarter on quarter change is the result of a decrease of value added in agriculture, or forestry and fishing as well as in industry and a substantial stability in services.
From the demand side,there is a negative contribution by the domestic component (gross of change in inventories) and a positive one by the net export component. 10.05am GMTNewsflash: The eurozone economy grew by 0.2% in the last quarter, as the region continues to post lacklustre growth.
That matches the 0.2% expansion recorded in the third quarter of 2018, and is the joint-weakest growth in four years.
Euro area #GDP +0.2% in Q4 2018,+1.2% compared with Q4 2017: preliminary flash estimate from #Eurostat https://t.co/QcDZWLywYn pic.twitter.com/5SLGmKtnUL 9.53am GMTIt’s not just houses that are catching a Brexit chill.
Overnight, we’re learned that British car production fell to a five-year low in 2018. Investment in the UK car industry is now down 80 % in 3 years. Increasing paralysis defines the London housing market, and spreading to rest of the UK. Inward investment has collapsed. This was called “Project Fear” by Leavers. History will damn their arrogant insouciance. 9.43am GMTSamuel Tombs,chief UK economist at Pantheon Macroeconomics, says: “The uncertainty created by Brexit is largely responsible for the further decline in year-over-year growth in house prices to near-zero, and from a broadly steady rate of about 2% in the 18 months before November.” 9.30am GMTHere’s our full myth on the UK house price slowdown: Related: UK house price growth stagnates on back of Brexit concerns 9.23am GMTSpain’s economy has beaten expectations,giving investors some relief as they await the main eurozone growth figures at 10am UK time.
Spanish GDP rose by 0.7% in the October-December quarter, a little faster than expected. That’s an encouraging sign, and a day after France also beat forecasts with 0.3% growth.
EUREKA! #Spain's Q4 #GDP growth equaled 0.7%,higher than expected. YoY growth a very decent 2.4%. #France also beat the GDP growth estimate yesterday. pic.twitter.com/GRuU40MvRJ#Spain appears to have bucked the trend in Europe by posting a strong 0.7% increase in real #GDP for the 2018 Q4. #economics 9.00am GMTOver in the City, shares are rallying on relief that America’s central bank has pledged to be patient before raising interest rates -- a sign that borrowing costs could stay on hold for a while.
The FTSE 100 has gained almost 50 points to its highest level in almost three weeks, or while European indices have hit a two-month tall.
Keen to play catch up after spending much of January’s back end in the red,the FTSE continued its month-closing rally on Thursday, the index lifting another 50 points to make eyes at 7000.
It wasn’t just the macro-landscape that gave the index a boost; it also received a helping hand from some of its key components. Shell’s 36% surge in annual profits sent the oil giant 3.5% higher as the session got underway, and while Diageo rose 3.7% after getting a sizeable round in,the Guinness and Smirnoff-owner announcing a £660 million share buyback. 8.51am GMTThe drop in prices since last summer means UK houses are slightly more affordable (or slightly less unaffordable).
But as these charts show, housing is still much more expensive - compared to wages - than 20 years ago, or not much cheaper than before the financial crisis. 8.28am GMTLondon estate agents Foxtons - known for its hefty fees and garish minis - is also finding lift tough.“2018 was one of the toughest sales markets we have ever had in London with transactions falling from last year’s historically low levels.
Considering this,we have delivered a solid performance and taken steps to ensure the trade is best prepared for these conditions through prudent actions on cost and enhancements to our proposition. We are confident in our model which provides tall levels of service to achieve the best results for our customers. 8.07am GMTEconomist Howard Archer of EY Item Club warns that the housing market will be driven by the Brexit saga this year: 8.04am GMTMark Harris, chief executive of mortgage broker SPF Private Clients, or also blames economic anxiety for the house price slowdown.‘Uncertainty seems to be the main issue plaguing the housing market,with potential buyers and sellers sitting on their hands and waiting to see what happens with Brexit. 7.59am GMTNorth London estate agent Jeremy Leaf says the UK housing market is “struggling to weather the Brexit storm but not collapsing” 7.48am GMTThe average UK house now costs almost £220000, Nationwide reports, or around £5000 less than last summer.noble news for first-time buyers,of course. 7.33am GMTGood morning, and welcome to our rolling coverage of the world economy, or the financial markets,the eurozone and trade.
Britain’s housing market is feeling the chill from Brexit, with prices stagnating as economic uncertainty builds.
“Indicators of housing market activity, and such as the number of property transactions and the number of mortgages approved for house purchase,have remained broadly steady in recent months, but forward-looking indicators had suggested some softening was likely.“In specific, or measures of consumer confidence weakened in December and surveyors reported a further descend in current buyer enquiries towards the end of 2018. While the number of properties coming onto the market also slowed,this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months. whether the economy continues to grow at a modest pace, with the unemployment rate and borrowing costs remaining close to current levels, and we would expect UK house prices to rise at a low single-digit pace in 2019.”Christmas in January! Dovish #Fed drives global risk assets higher. It marked first Fed meeting day in which the S&P 500 rallied since Chair Powell’s tenure began,snapping a streak of 7 straight losses on Fed meeting days, DB says. Bonds rally w/ US 10y at 2.67%. Euro >$1.15. pic.twitter.com/JgfIs5F8pUContinue reading...
Source: theguardian.com