All the day’s economic and financial news, as investors digest Angela Merkel’s failure to reach a deal with Germany’s Free Democrats.

The possibility that Angela Merkel could be forced out of the German Chancellery will worry the City, says Rebecca O’Keeffe, head of investing at interactive investor.

“European equity markets have picked up where they left off last week, heading lower after the FDP walked out of German coalition talks. Angela Merkel has been the glue that has held the European Union together for the past 12 years, a stable force in turbulent times.

Chancellor Merkel is also one of the few European politicians who has demonstrated she may be prepared to compromise with Britain, rather than run the risk that Prime Minister May is replaced by a hardline Brexiteer. With almost unsurpassed political experience, markets will want Germany to find a quick solution, preferably one that leaves Mrs Merkel in situ.

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