Global News
Italian Prime Minister Conte – Italy’s Prime Minister, Guiseppe Conte, announced his resignation this week. This comes as the coalition’s deputy Prime Minister Matteo Salvini, who leads the right wing Lega party, recently called for a vote of no confidence in Conte. Italy has been governed by a two-party government since March 2018, with elections not able to give a majority. Italy’s future now lies in the hands of President Matarella, who after accepting Conte’s resignation, will hold talks to see whether any parties can form a majority government. If a clear majority cannot be found, a fresh election will be called in Rome.
US-China trade war – China have retaliated to the 10% import tariffs on $300 billion worth of goods implemented by US President Donald Trump. China announced that it will impose additional tariffs on $75 billion of US imports, with the countermeasures taking effect from the 1st September.
PM Johnson visits Germany – UK Prime Minister Boris Johnson visited the German Chancellor Angela Merkel for the first time since becoming PM. During the meeting, both parties said that they would like to see the UK leave on the 31st October with a deal in place, with the only real issue being the Irish backstop agreement. PM Johnson stated that the EU must drop the backstop from the deal otherwise the deal will not get through parliament. Chancellor Merkel added that the issue could take years to resolve, however, she then added “perhaps we can find this solution in the next 30 days.” PM Johnson accepted the challenge, and countered stating that if the backstop agreement could be changed, there would be a prospect of “making progress very rapidly”.
German economic data – Germany’s manufacturing purchasing managers index (PMI) figure came in at 43.6, above forecasts of 43. Despite the figure beating forecasts, it still falls below the key level of 50, which separates contraction and expansion. This is now the seventh month of contraction in manufacturing, with orders falling at the fastest pace in six years. Germany’s service PMI figure also fell to a seven month low, reinforcing fears of a German recession in the third quarter of 2019.
