The German economy shrank in the three months to June as trade tensions weighed on its export-heavy manufacturing sector and intensified the pressure on politicians in Berlin to loosen the fiscal purse strings, the Financial Times reported. Germany’s output fell 0.1 per cent in the second quarter from the previous three months, meaning annualised output growth slowed to 0.4 per cent in the year to June — its slowest for six years.

Europe’s bankers greeted the news with a collective groan: The negative interest rates that had eaten into incomes for the last half a decade are set to continue and even worsen in the years ahead, Bloomberg News reported. Pointing to yet another period of ragged earnings, executives called for special breaks from the European Central Bank to soften the blow of further rate cuts and other measures to stimulate economies across the eurozone.

The bond market used to like the idea of Matteo Salvini as Italy’s leader. Now it’s becoming worried. As League party leader Salvini attempts to force fresh elections, investors fear victory would embolden a new government to ramp up spending and clash with the European Union again over budget deficit limits, Bloomberg News reported. With the nation’s bonds having seen the biggest one-week selloff since the current coalition was formed in May last year, more turmoil is expected and could lead its borrowing costs to return to levels that could rattle global markets.

One of Scotland’s leading providers of financial help, Scottishtrustdeed.co.uk, recently compiled a report on Scotland’s top insolvency hotspots from 2018, News Reel Hub reported. Glasgow and Edinburgh may have some of the highest numbers of insolvencies in terms of pure numbers, but it’s people living in rural communities, ‘fringe’ areas and Dundee who face the biggest risk of bankruptcy. The Accountant in Bankruptcy’s (AiB) latest report shows that a total of 4,644 people were declared bankrupt in the period 2017/18, representing an increase of 1.8% on the previous year.

It’s turning out to be a torrid summer for the usually sedate lead market. The London Metal Exchange (LME) lead market was roiled in early June by news of an unplanned outage at the Port Pirie lead smelter in Australia, Reuters reported. It’s just been upended again by a second shutdown of the plant, which is operated by Nyrstar, the Belgian company that had to be rescued from potential insolvency by trade house Trafigura. The second outage has seen LME time-spreads tighten again and the outright three-month price hit a two-week high of $2,101.50 per tonne on Monday.

A legal bid to prevent British Prime Minister Boris Johnson suspending parliament to stop lawmakers blocking a no-deal Brexit will be heard at a Scottish court next month, the International New York Times reported on a Reuters story. A group of about 70 lawmakers from opposition parties are backing a bid to have Scotland's highest civil court rule that Johnson cannot ask Queen Elizabeth to prorogue, or suspend, parliament before Britain leaves the European Union on Oct. 31.

Expectations for the German economy have slumped to their lowest level since the eurozone debt crisis eight years ago amid deepening concerns over the US-China trade dispute and the potential for a chaotic UK exit from the EU, the Financial Times reported. The Zew survey of financial market experts revealed on Tuesday that economic sentiment in August had dropped to minus 44.1, its lowest since December 2011 and much gloomier than estimates from analysts in a Reuters poll who had predicted it to be minus 28.5. The index had come in at minus 24.5 in July.

Once again, European banks tried hard in the latest earnings season, but ultimately failed to boost sentiment, Bloomberg News reported. Expectations were low and hence several lenders were able to post a beat, yet many banks warned of a challenging outlook as yields in Europe hit all-time lows. Citigroup notes that seven out of nine regional markets under their coverage were able to surpass estimates, with the strongest positive surprises from Spanish and Swiss lenders.

European insurers are snapping up more emerging-market debt, spurred on by worries that negative-yielding bonds in Europe might not offer enough returns to meet their future payments, the International New York Times reported on a Reuters story. The move represents a shift for investors, who have usually filled much of their portfolios with high-grade bonds issued by developed-market governments and companies. An estimated 250 billion euros, or around 5% of European insurers' assets, are invested in fixed income, up from 2% to 3% five years ago, said people at several insurers.

Household income, spending and wealth rose at the start of the year, bolstered by a strong labour market, according to the latest data, but Brexit uncertainties left consumers gloomy about the future direction of the economy, the Financial Times reported.