FEARS of a financial catastrophe in Europe if Britain votes to leave the union, has prompted the bloc’s top policymakers to plot an emergency Brexit plan of action.
A vote to Leave on June 23 could immediately plunge Europe’s stock markets into meltdown amid fears the union is heading for collapse.
In a bid to stop the chaos, the European Central Bank (ECB) has now decided it would publicly pledge to do “whatever it takes” to prop up markets if and when a Brexit is announced, according to reports. Continue reading
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Dam breaks in Europe as deflation fears wash over ECB rhetoric
‘We are reaching the end game in Europe. If they don’t launch real QE soon, the consequences are too awful to contemplate,’ warns RBS
A key gauge of deflation risk in Europe is flashing red, dropping to record lows on fears of fresh recession and lack of decisive action by the European Central Bank.
The sudden lurch downwards came as Bank of America warned that France’s debt ratio could rocket to 120pc of GDP within five years, unless the EU authorities take radical steps to reflate the region’s economy. Italy’s debt could threaten 150pc even earlier.
The 5-year/5-year forward swap rate monitored closely by traders plummeted beneath 1.77pc on Friday morning as a global growth scare drove European stock markets to a 12-month low.
“This rate is the most important market signal on the planet right now. Everybody is watching the chart, and it has just gone off a cliff,” said Andrew Roberts, credit chief at RBS.