Angela Merkel Brexit crisis: Boris’ no deal would plunge Germany into economic meltdown

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Shock industrial figures this week stunned European economists, sparking concerns that Germany’s economy was sliding towards a recession. Once the leading economic engine of the EU, Mrs Merkel has seen her country’s economy plunge into uncertainty. There are now fears among investors that a hard Brexit would cause a dramatic freefall in the German economy.

Christopher Peel, CIO of Tavistock Investments, told CNBC: “It is the graveyard trade. The European Banking Index has been reasonably volatile over the last ten years, it is now close to the lows.

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“Compared to the US financial sector, it has really really underperformed. It should be attractive but the banking industry seems to follow the economy.”

The strategist continued: “The fact is that the European economy is really struggling, especially in Germany.

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“The dependence on the manufacturing auto sector, which is export-oriented, is a real problem, especially if one feels that we are going to have a hard Brexit, which would really put pressure back on the German economy.”

Mr Peel added: “There is nothing the European Central Bank could do to make eye more optimistic.

“I think they have played their last cards. They have trillions of European debt on their books. They need to export their way out of the current situation.”

The warning of a Brexit-induced economic catastrophe  in Germany follows figures that showed that the largest eurozone economy was heading for contraction

The industrial production in Germany dropped by a larger-than-expected 1.5 per cent month on month in June.

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This has raised fears that Europe’s largest economy could be heading for its first recession in more than six years.

Carsten Brzeski, ING’s chief economist for Germany, characterised the figures as “devastating, with no silver lining”.

Mr Brzeski said: “We should prepare for contraction in the German economy in the second quarter, unless exports bring an unexpected surprise on Friday.”… Click link below to read more

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Angela Merkel Brexit crisis: Boris’ no deal would plunge Germany into economic meltdown

Shock industrial figures this week stunned European economists, sparking concerns that Germany’s economy was sliding towards a recession. Once the leading economic engine of the EU, Mrs Merkel has seen her country’s economy plunge into uncertainty. There are now fears among investors that a hard Brexit would cause a dramatic freefall in the German economy.

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