Once again the same issues which have plagued equity markets throughout 2018 persisted in the final month of the year. All bar one appeared to be any closer to resolution resulting in another poor month for European equity markets rounding off a deeply negative year. The one glimmer of hope was Italy, where technical agreement was reached between the government and the EU over the proposed budget changes. This event does head off a dangerous confrontation and was rewarded by declining bond yields, but, in reality does little to address Italy’s long-term problems of a burgeoning government debt pile and anaemic growth prospects. Agreement was far harder to find in the UK where Prime Minister May was forced to delay the parliamentary vote on her Brexit deal while at the same time having to face a vote of no confidence in her leadership. Her success in that vote was far from convincing with a third of her party failing to give their support which does not bode well for the vote on the Brexit deal when it does eventually take place on January 14th 2019. But perhaps more importantly for equity markets were the more direct threats to global growth from issues ranging from the Chinese/US trade spat to the yellow vest protests in France. No wonder that when the Federal Reserve persisted with an interest rate rise toward the end of the month that the market reaction was deeply negative.