The Brexit deadline was shifted once again, this time from 31 October to 31 January 2020. The EU’s chief Brexit negotiator Michel Barnier called for a close post-Brexit relationship between the UK and EU, based on economic exchange and co-operation in the areas of security and defence.
- The eurozone’s Q3 economic growth was slightly better than expected
- Question-marks remain over Germany’s economic strength
- Europe’s manufacturing sector continued to deteriorate
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Although the UK and EU managed to reach a new Brexit Withdrawal Agreement, UK Prime Minister Boris Johnson failed to secure MPs’ support for his timetable. As a result, the Brexit deadline was shifted once again, this time from 31 October this year to 31 January 2020. European Council President Donald Tusk tweeted: “To my British friends, The EU27 has formally adopted the extension. It may be the last one. Please make the best use of this time”.
“M. Barnier stressed that stability in Ireland is crucial and the single market’s integrity remains non-negotiable”
The EU’s chief Brexit negotiator Michel Barnier called for a close post-Brexit relationship between the UK and EU, based on economic exchange and co-operation in the areas of security and defence. M. Barnier stressed that stability in Ireland is crucial and the single market’s integrity remains non-negotiable. During October, the Dax Index rose by 3.5% while the CAC 40 Index increased by 0.9%.
Third-quarter growth in the eurozone proved to be slightly better than expected: the region’s economy expanded at a quarterly rate of 0.2%, following second-quarter growth also of 0.2%. On an annualised basis, the eurozone’s growth continued to lose momentum: the region expanded by 1.1% during the third quarter, following growth of 1.2% in the second quarter and 1.3% in the first. Germany’s economy shrank by quarter-on-quarter rate of 0.1% during the second quarter of 2019; a contraction in the third quarter would push the country into a technical recession, but investors will have to wait until the middle of November for the data.
President of the European Central Bank (ECB) Mario Draghi warned that the eurozone’s economy will face a period of “protracted weakness” caused by a broader global slowdown and Brexit-related uncertainty. Mr Draghi will be succeeded in his role in November by Christine Lagarde, the former Managing Director of the International Monetary Fund (IMF).
The eurozone’s manufacturing sector declined to its lowest level since October 2012, according to IHS Markit, which predicted a “grim” outlook for the sector and for the wider European economy. German manufacturers suffered particularly badly, falling to its lowest level since August 2009, and downturns in Italy and Spain also appear to be deepening. The rate of inflation in the euro area eased from 0.8% in September to 0.7% in October, dampened by lower energy prices. Meanwhile, the unemployment rate remained steady at 7.5%.
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