German Recession Means Europe Will Suffer

Data revealed last week shows that Germany is slipping into recession.  Ultimately this means that Europe will suffer too.

According to IHS Markit’s Germany Composite PMI, the EU bloc’s largest economy saw its weakest business activity and growth in over 3 years.

Employment growth is at its lowest since early 2016 and new business was at its lowest rate for more than 6 years.

September saw manufacturing in the Eurozone the worst in 7 years and services down too.

With foreign demand falling, the German economy was slower for the 13^th month in a row as exports fall.

Comment

The European Central Bank has responded reducing interest rates with an even larger 'negative rate' at -0.5% pa.  In short, the Bank pays you to borrow money rather than charging you.  We believe this will still not be enough for German/EU recession.  Brexit will hurt all.  US tariffs will hurt all.