The Italian newspaper la Repubblica said on Thursday that the country’s budget does not include measures strong enough to boost growth. By citing a European Commission document, the newspaper has stressed that the budget instead makes Italy a “contagion risk” for the Eurozone. According to the newspaper, the Commission’s Country Report will reveal that Italy’s 2019 budget will negatively impact economic growth and national debt. The report is set to be approved by the European Commission next Wednesday. “There are no measures capable of positively impacting on long-term growth,” the document said, as announced by la Repubblica. Last month, Italy slipped into its third recession in a decade. New GDP figures revealed that the country’s economy decreased by 0.2% over the last three months, following a 0.1% decrease from the third quarter. Being the third largest economy in the Eurozone, Italy’s recession has dragged down the rest of the region. The Eurozone only grew 0.2% in the final quarter of 2018, which is the same increase as that of the third quarter. Following the coalition between the right wing League party and anti-establishment Five Star Movement last year, the government revealed controversial budget plans. This sparked months of quarrelling with Brussels over the ambitious proposal that breached rules on government borrowing. Despite the original 2.4% figure being below the EU’s deficit limit of 3%, it remained far too high a figure for a country whose debt is as big as Italy’s. Italy’s recession means that its growth targets of its approved budget are highly unrealistic. The European Union’s economic commissioner, Pierre Moscovici, has not released a direct comment on the report cited by la Repubblica. He has said that the Commission will meet with Italy in May. “We will have to discuss in May with the Italian authorities where we are and the implementation of our agreement in December,” he said to a conference organised by Politico in Paris.

Ferrero has announced that it has temporarily stopped production at the biggest Nutella production plant in France’s Normandy region. Production was halted as a result of quality issues on Tuesday afternoon. “After reading the results of one of the quality checks at out Villers-Ecalles factory, we noticed quality defect in one of the semi-finished products used in the manufacturing of our products Nutella and Kinder Bueno,” the company said. “For now, we can say that none of our products currently on the market are affected by the situation and that supply to our customers continues uninterrupted,” it continued. Halting production is a precautionary measure taken by the company to investigate further. The outcome of the investigation is expected at the end of the week. Ferrero has said it would take countermeasures once these are made known. The chocolate hazelnut spread is one of the most iconic chocolates in the European confectionary market. Ferrero produces roughly 365,000 tonnes of Nutella each year. Elsewhere, Ferrero competitor Nestle revealed earlier this week that it was well positioned in confectionary following the success of its KitKat chocolate. Nestle sold its U.S confectionary business to Ferrero in a $2.8 billion deal last year, made to push Nestle closer towards more health-conscious products. Yesterday, the Nutella maker announced that its revenue reached $12 billion in the year ended in August 2018. Revenue was driven by its latest acquisition from Nestle as it included the sale of products such as Butterfinger and BabyRuth chocolate bars that were acquired under the deal. Originally founded in Alba, Italy by Pietro Ferrero in 1964, the company has been pursuing an acquisition campaign for four years under the Executive Chairman Giovanni Ferrero. In addition to its iconic chocolate hazelnut spread and Ferrero Rocher pralines, the confectionary business also produces Tic Tac sweets. Ferrero International SA’s headquarters is in Luxembourg.

The CEO of Heathrow airport said on Thursday that Europe’s biggest airport could benefit from additional trade if the UK leaves the European Union without a deal. Indeed, John Holland-Kaye told Reuters that if other modes of transport are blocked by additional congestion, London Heathrow trade could be boosted. “In the short-term, if there are queues at Dover, then there may be more cargo going on short-haul planes from European markets,” he said. “We don’t want to have a no-deal Brexit, and we don’t see a commercial advantage in a no-deal Brexit, but we are prepared for no deal.” According to the CEO, the airport has been preparing for a no-deal Brexit for the past four to five months. Preparations include stockpiling items such as mechanical components and rubber gloves that are imported from the EU. Though a no-deal outcome would not be idea for the airport, the airport is able to adapt in the case that the UK’s departure from the European Union comes without a deal. If the UK fails to come to an agreement with the EU, then it will leave the union next month without a deal. Across the channel, France announced that it is set to invest roughly £44.3 million in its ports and airports in order to brace itself for a no-deal. The French prime minister said that he “strongly believed” Britain would depart from the European Union without a deal. He told Reuters that he had decided to “trigger the plan for a no-deal Brexit” because a no-deal scenario is growing likelier. Elsewhere, UK businesses are bracing themselves for the official departure date – March 29^th. Many food retailers have stockpiled goods in the event of a disruption of the imports of goods into the UK. Unilever is one of the latest companies to reveal its Brexit contingency plans, announcing last month that it was stockpiling ice-cream ahead of the departure date. As the departure date draws closer, the nation has been left in the dark, now more than ever, regarding the country’s political future.

UBS has been ordered to pay a £3.9 billion fine by a French court over tax evasion allegations. The French court ruled that UBS should pay the fine, alongside €800 million to the French state, after the bank was found guilty of illicit solicitation and laundering of the proceeds of tax fraud. In a statement, the lender said it will appeal the French court’s decision, stating that it “strongly disagrees with the verdict.” It added: “The bank has consistently contested any criminal wrongdoing in this case throughout the investigation and during the trial. The conviction is not supported by any concrete evidence, but instead is based on the unfounded allegations of former employees who were not even heard at the trial.” The penalty is a significant blow to UBS, given that it proves higher than the bank’s 2018 profit of £3.7 billion. However, launching an appeal will mean the bank will not have to immediately initiate repayments. Shares in UBS (SWX: UBSG) fell sharply immediately after the news hit the markets. Back in September, UBS announced it was shifting operations to Frankfurt as a result of Brexit. It is one of many financial institutions to announce their intention to vacate London because of the withdrawal negotiations. Shares in the Swiss bank are currently down 1.32% as of 13:03PM (GMT).  

UK government borrowing from April through to January was £21.2 billion, marking £18.5 billion less than the year before. According to the Office for National Statistics (ONS), net borrowing for the month was in a record surplus of £14.9 billion, an increase of £5.6 billion from last January. This marked the largest surplus for the UK government since records began in 1993. This was attributed to a rise in self-assessment income tax as well as capital gains tax. Howard Archer, chief economic adviser to the EY Item Club, commented: “A record high surplus on the January public finances provides a much-needed welcome boost for Chancellor Philip Hammond as he faces a worrying backdrop to his Spring Statement on 13 March. “With the economy clearly struggling early on in 2019 after a sharp slowdown in the fourth quarter of 2018 and the Brexit situation highly uncertain, the chancellor will have a lot on his mind when he presents the Spring Statement. “It looks highly likely that he will have to announce downgraded growth forecasts from the OBR [Office for Budget Responsibility] at least for the near term, with possible negative ramifications for expected budget deficits.” The chancellor Philip Hammond is set to deliver his next budget statement on the 13th of March. Whilst the chancellor will be busy putting together his speech, the rest of the UK government has been preoccupied with the deflection of three of its Conservative MPs, making it even harder to pass any legislation in parliament. On Wednesday, Anna Soubry, Sarah Wollaston and Heidi Allen joined the Independent Group, resigning their membership from the Tory party. The Independent Group now includes 8 Ex-Labour MPs and 3 Conservative deflectors.  

Energy supplier Centrica (LON:CNA) has warned of the consequences the national price cap on energy bills will have on its 2019 financial performance. Shares in the Windsor-based energy company dropped over 11% during early trading. Centrica is the UK’s largest energy supplier with over 12 million customers. The price cap on default energy tariffs was set in motion on the 01 January this year, and is expected to save 11 million UK households roughly £76 each. These customers are said to be overcharged for their energy bills under the default tariffs. Though Centrica reported a 12% increase in its 2018 operating profit, it has warned that the energy price cap would lead to a one-off negative adjusted profit impact of roughly £70 million in the first quarter of 2019. “We have been very clear that we do not believe a price cap is a sustainable solution for the market, and is likely to have unintended consequences for customers and competition,” Centrica commented in its financial results. “We expect the price cap to result in some negative near-term impact on earnings and cash flow in UK home, particularly in 2019, before we have fully realised planned cost efficiencies,” the company continued. The owner of the UK’s largest energy supplier, British Gas, has made its opinion clear of the energy price cap. Last December, the company said it would launch a legal challenge to the government’s energy price cap. A judicial review against the price cap was sought just days before the cap was set to begin. Ofgem announced earlier this month that the energy price cap would be raised by £117 for customers on default tariffs, including standard variable tariffs on 01 April. The increase is expected to impact around 15 million UK households. Earlier this month, energy supplier E.On was the first major company to announce price hikes in response to the new Ofgem cap set to begin in April. At 08:55 GMT Thursday, shares in Centrica plc (LON:CNA) were trading at -11.41%.