Investors have flocked to fixed income mutual funds at the fastest rate since the financial crisis, piling in almost $500bn in the first half of 2019 during trade war tensions, recessionary fears and market volatility, the Financial Times reported. About $487bn flowed into fixed income funds this year, up from $148bn in the first half of 2018, according to figures from Morningstar, the data provider. It is the highest level of first-half net inflows into bond mutual funds for at least a decade.

Burford Capital, a London-listed fund that finances lawsuits in return for a cut of any payouts, said it is considering buying back shares, a day after short-seller Muddy Waters criticised its accounts and said it had bet on its shares falling, Reuters reported. “The board is ... considering the company buying back its own shares, given the potential investment return the shares represent at their current price,” it said in a statement.

The German economy is stuck in a rut. The country’s large, export-dependent manufacturing sector is reeling from the collapse in global trade while problems within domestic industry compound the overall economic malaise, the Financial Times reported. The services sector has held up, but the disconnect is not certain to last much longer — business cycle indicators already point to a mild recession. Benefits from further monetary easing will be constrained by unprofitable banks and vast savings. Fiscal space is abundant. It must finally be used.

Investors seeking shelter from the sea of negative-yielding assets may provide a further boost to Europe’s direct lending market, Bloomberg News reported. Private debt fund managers say the ultra low interest rate environment is set to drive more money into the business of lending to mid-sized companies. Fundraising for the strategy totaled $10.7 billion from January to June, according to research firm Preqin, and the second half of the year is off to a bumper start with several multi-billion-euro fundraisings already announced.

Italian regional bank Popolare di Sondrio (BPSI.MI) said on Thursday it would sell 1 billion euros’ ($1.1 billion) worth of bad loans to lower their share of total lending to around 8% by 2022, Reuters reported. The bank said it had booked 106 million euros in loan writedowns between January and June, raising its provisions on defaulted loans to 68.4% of their value, meaning the latest sale was not expected to have any further negative impact. Popolare di Sondrio held impaired loans equivalent to 13.65% of total lending at the end of June.

The cost of insuring PizzaExpress’ debt against default has jumped to its highest level amid concerns over the chain’s borrowing as it grapples with an increasingly difficult UK market and a costly overseas expansion, the Financial Times reported. As one of the oldest and largest casual-dining operators in the UK, PizzaExpress has been buffeted by slowing consumer spending and increased costs from a combination of rising business rates and increases to the national living wage.

Leoni has hired an external adviser to monitor its ongoing restructuring, two sources said on Thursday. Magazine WirtschaftsWoche reported that representatives of Leoni’s creditors had met on Monday to discuss the firm’s liquidity situation, Reuters reported. Leoni has hired Hans-Joachim Ziems as an external expert for the restructuring, the sources told Reuters, adding that Leoni managed to reassure its creditors. Leoni said it was in constructive talks with its creditors but declined to provide details, adding that its lenders supported its saving and strategy scheme.

Industrial production in Germany dropped by a larger-than-expected 1.5 per cent month on month in June, compounding fears that Europe’s largest economy could be heading for its first recession in more than six years, the Financial Times reported. Analysts polled by Reuters had estimated output would fall 0.4 per cent during the month compared with May. The fall meant that industrial production was 5.2 per cent lower than a year ago, Germany’s statistics office said. Carsten Brzeski, ING’s chief economist for Germany, characterised the figures as “devastating, with no silver lining”.

An investment group owned by Turkey’s military pension fund is in last-minute talks about a takeover of British Steel, offering hopes of a deal that could save thousands of jobs, the Financial Times reported. Ataer Holding, a wholly owned vehicle of state military retirement scheme Oyak that is also the largest shareholder in Turkish steel group Erdemir, is negotiating with the UK government about acquiring the collapsed steelmaker, according to two people familiar with the matter.

Large European banks lined up on Wednesday to warn that the low interest rate environment would hurt their earnings, wiping hundreds of millions of euros off their market valuations, the Financial Times reported. UniCredit, Italy’s second-largest bank by market capitalisation, cut its revenue forecast for this year to €18.7bn from €19bn due to what chief executive Jean Pierre Mustier described as the “prevailing environment, with rates expected to be lower for much longer”.