Europe has a 70% chance of plunging into recession, according to renowned economist and bond market expert Mohamed El-Erian, with Britain, Italy and Germany “paralysed” by domestic issues that have stalled the economies of the EU’s most powerful nations.

In an exclusive interview with Financial News, the chief economic adviser to Allianz, the German insurer, warned Europe is “quickly losing momentum”, leaving the trading bloc “teetering on the edge of a significant slump”.