Pound LIVE: GBP Sterling soars against euro as Italy ‘becomes NEW ARGENTINA’
THE pound traded higher against the euro this morning as Italy economy fears continued to rattle the eurozone. Italian government officials have been forced to defend plans to run a huge budget deficit as analysts predicted fears the European country could be plunged into an Argentina-style struggling economy.
By LEVI WINCHESTER
Express.co.uk
Mon, Oct 1, 2018
The euro has been left scrambling as a result of uncertainty over Italy’s budget, sparking a broad-based decline in the euro exchange rate, according to www.poundsterlinglive.com.
It comes after Italy’s ruling parties – the anti-establishment 5-Star Movement and the right-wing League – last week proposed a 2019 deficit of 2.4 percent, three times the previous administration’s target.
Shockwaves from this announcement saw the pound rise by 0.3 percent against the euro this morning, trading at a rate of €1.125.
This later dropped in the afternoon to trading at around €1.122, before climbing again to €1.127.
Italian economy minister Giovanni Tria was forced to defend the deficit budget over the weekend as he vowed the debt level will be brought under control.
In an attempt to downplay fears, Mr Tria declared economic growth in Italy will be boosted by investments over the next two years.
Mr Tria, an economist who belongs to neither ruling party, said reassurance from the Commission and markets will come once they have a clear view of next year’s budget.
This is due to be presented by October 20.
He told Il Sole 24 Ore: ”My hope is that by explaining the budget that we are preparing and the tools we plan to use to reach our main objective, which is growth, that the fears will cease.”
Despite his attempt to ease pressure, analysts are predicting further trouble ahead for Italy as they suggest the cost of borrowing has almost doubled since the government took power last spring.
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