By Marcus Leach

European markets remain unstable after news of Italy’s borrowing hit a record high of 7%, which reintroduced fears over the debt crisis.

After the FTSE opened at a low, it has had a volatile morning. The European Union has announced a cut in its growth forecast in 2012 from 1.8% down to just 0.5%.

“Uncertainty in the eurozone will pull down on the markets and hinder growth in the region," John Douthwaite, CEO of SimplyStockbroking said.

"The outlook for UK investors looks tough,as Europe has moved from the slightly manageable crisis of Greece to the 3rd largest economy in Europe, Italy. Fears of slipping back into a European recession are substantial.

“The main issue facing European economies is the lack of growth and confidence. The European growth forecast has been downgradedto just 0.5%, which is very unsettling for investors as the value of the Euro weakens.

"Many of the European banks are over exposed to the crisis and even companies are feeling the strain.The forecast for the next couple of years looksmultifaceted for investors, if volatility continues in the stock markets investors will be looking for ways to trade on the stock exchange to make a profit in the short term."

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