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Italy back in recession

Italy has unexpectedly returned to recession, highlighting the difficulties faced by the country's prime minister Matteo Renzi.

Italy's economy shrank 0.2pc between April and June after contracting 0.1pc in the previous three months. The figures come on the eve of the European Central Bank's August interest-rate meeting, two months after it announced an unprecedented package of stimulus measures to kick-start the sluggish economy. Italy is the euro area's third-biggest economy and a recession will dent its growth prospects.