Slowdown Worries Continue To Plague The Eurozone

The downbeat data comes as the uncertainty due to Brexit and the weakening global outlook weighed on the economic bloc.

Eurozone’s economy was already under pressure as data in late 2018 showed a marked slowdown in the pace of economic expansion. This trend is expected to continue going by the latest reports for January. The continued declines come as decelerating growth from China could spell a slower pace of growth for the global economy.

This is likely to become a major concern for not just investors but also policymakers.

The British Prime Minister, Theresa May is set to renegotiate the UK’s Brexit deal with Brussels. The UK’s parliament rejected previous attempts to pass the Brexit deal.

The main sticking point has been the Irish border backstop arrangement which the UK is trying to avoid with Ireland. EU leaders have however maintained that the Brexit agreement was not up for negotiation.

Eurozone investor confidence takes a hit for the fourth consecutive month

Italy, Europe’s third-largest economy showed little signs of recovering from a recession in the fourth quarter of the year.

Latest reports showed that investor confidence in the Eurozone fell to a four year low as confidence fell for the fourth straight month. Data from the Frankfurt-based Sentix showed that investor confidence fell to -3.7 in February, down from -1.7 in January.

The current conditions index fell to 10.8 from 18 which was the weakest reading since December 2016.

Meanwhile, Germany’s investor confidence also posted similar trends as the index fell for the fourth consecutive month.

“A major reason for this development is likely to lie more and more in the approaching Brexit. The economy now has to deal with the contingency plans in view of the unresolved political situation,” a spokesperson for Sentix said.

Eurozone retail sales fall the most since 2011

Business activity surveys released last week showed that the output in France declined alongside the Eurozone’s retail sales which marked the steepest monthly decline since the middle of 2011. Data from the European statistics agency, Eurostat showed that retail sales fell 1.6% on the month in January, down from a revised 0.8% increase the month before.

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