Germany’s economy shrinks unexpectedly as GDP declines by 0.1% in the second quarter of this year, missing economist’s expectations of 0.1% growth. The decline in activity was driven by a fall in manufacturing and construction investments, attributed to various factors such as an ailing train network, rising energy prices, protests by farmers, weaker demand from China, and political shifts towards far-right politicians. This decline in GDP marks a potential entry into a technical recession if the trend continues for another quarter.
Moody’s Analytics economist Ross Cioffi warns that the outlook for the Eurozone remains precarious, despite positive growth figures from Spain and France. Cioffi explains that the second quarter Eurozone GDP figure of 0.3% exceeded expectations, with most major economies growing more strongly than anticipated, except for Germany. The UK firm Barclays Partner Finance is under scrutiny for overcharging on car loans, with a possible redress scheme being considered.
In the car world, Tesla is updating software on more than 1.8 million vehicles in the US to address a safety issue related to unlatched bonnets. The pound remains stable against the dollar, but could weaken if the Bank of England decides to cut interest rates. S&P downgrades Bangladesh’s credit rating due to ongoing unrest and economic pressure from declining foreign exchange reserves. Despite these challenges, JP Morgan remains bullish on UK stocks, citing favorable conditions such as attractive valuations, improved political clarity, and potential lower bond yields.
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