Concerns about when, and in what manner, the UK departs the European Union may still be nagging the markets but fears about one or more members leaving the eurozone abated in August, according to an index that tracks the likelihood of a break-up of the single currency area.

German research group Sentix’s euro break-up index fell 4.6 points for August to 15.7, which means that 15.7 per cent of all investors surveyed expect the euro-area to break up within the next 12 months. This is well below the crucial reading of 20 that normally occurs during periods of very negative newsflow around the euro-area. The index reached a high of 73 per cent in July 2012.

Investors who contribute to Sentix’s monthly survey aren’t entirely assured, however, and persistent problems in Italy’s banking industry – which is burdened by bad loans – and lacklustre growth in the bloc continued to weigh on their minds. Sentix said:

Despite the positive development in overall risk levels, we still cannot give the all-clear signal. The sentix Contagion Risk Index [the red line in the chart above], which measures the sensitivity that a crisis in a member state could trigger a chain reaction, points towards persistent threats.

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