SHOWDOWN BETWEEN SPAIN AND CATALONIA SET TO COME TO A HEAD

Mr Rajoy said he hopes the measures planned, including the sacking of Mr Puigdemont's government and curtailment of the Catalan parliament's powers, will be brief.

Output will grow by 2.3% next year instead of the 2.6% previously projected, the economy ministry said, citing the impact of the political standoff in Catalonia, which accounts for a fifth of Spain’s gross domestic product, and the related struggle to approve a budget.

One of Catalonia's top separatist leaders pushing for a break from Spain has called for unity as disputes over strategy threaten to split the secessionists.