Cross-party Brexit talks between the government and the Labour party will continue later as MPs return from their Easter break. The European Union is due to release data on member states’ 2018 debt and deficit ratios as part of an assessment of whether they comply with eurozone rules. Analysts are starting to worry that Italy’s debt levels may pose the risk of a systemic financial crisis, with the likely scale of collapse much larger than the Greek debt crisis of 2015. Commenting on this was Capital Economics analyst Jack Allen.
He said: “Italy’s economy is essentially going to flatline in the medium term.
“This would be a bigger problem than the previous eurozone crisis and could once again endanger the single currency itself.”
Meanwhile, reports suggest Theresa May could be facing further issues, this time at a grassroots level.
Chair of the 1922 Committee Sir Graham Brady has urged Mrs May to name a departure date.
It is suggested that if she does not, executive members of Tory MPs could push for a rule change that could see the twelve month period between no-confidence votes halved, a move that would likely cause further uncertainty for Sterling.
This afternoon, the eurozone’s preliminary consumer confidence figure is due to be released.
If consumer confidence edges up, the single currency could rise.
Looking ahead to Wednesday, the euro could rise following the release of Germany’s IFO current assessment.
If April’s figure rises, showing that the current outlook for the bloc’s largest economy is improving, the single currency could regain lost ground against Sterling.