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Eurozone slump: Exports down, prices up – all indicators point to economic downturn

Eurozone slump: Exports down, prices up - all indicators point to economic downturn 1

Germany has been hit particularly badly as its inflation rates have dropped to 0.9 per cent from 2.2 percent in September last year. European Central Bank’s improvement measures have failed as across the Eurozone consumer prices dropped to 0.8 percent in September form one percent in August, according to Eurostat. Florian Hense, an economist at investment bank Berenberg, told The Financial Times: “Almost every time Eurostat has published inflation data so far this year, the result has been disappointing for the European Central Bank.”

“The jury is out as to whether the comprehensive policy package, which the ECB Governing Council adopted with a ‘clear majority’ in September, will bring inflation closer to target.”

Eurozone exports to the rest of the world fell 2.2 per cent in August compared with the same month last year and exports within the eurozone has fallen by 5.5 per cent.

International trade was dragged down by a 5.7 per cent fall in exports of machinery and transport equipment, which probably reflects the slowing global investment following the US-China trade war escalation.

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An International Monetary Fund (IMF) spokesperson said at the World Economic Outlook this week: “Higher tariffs and prolonged uncertainty surrounding trade policy have dented investment and demand for capital goods, which are heavily traded.”

JUST IN: Pound to euro exchange rate: Sterling enjoys ‘brief surge’

He said: “Sterling surged for a second consecutive day on Friday, rallying to its best levels since May against the common currency as expectations of a Brexit deal further increased.

“This latest rally came as a result of UK-EU talks entering the ‘tunnel’ – a period of intense, confidential negotiations between both sides, aimed at finalising a deal before next week’s EU Summit.

“Looking ahead, the importance of the week ahead cannot be overstated.

“Sterling will continue to trade in line with shifts in Brexit sentiment, with focus falling firstly on ongoing UK-EU talks, and then on Thursday and Friday’s EU Summit.”

Daily Express :: City and Business Feed

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