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Euro-zone Final HICP (Apr.)

April’s inflation data will confirm to policymakers – if any further evidence was needed – that they want to start raising interest rates very soon. A hike in July looks a near certainty and the probabilities are shifting towards an increase of more than 25bp.
Jack Allen-Reynolds Senior Europe Economist
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European Data Response

Euro-zone Unemployment (May)

The fall in the euro-zone unemployment rate in May to a new record low reaffirms the strength of the region’s labour market despite the apparent softening of activity. That will underpin an acceleration in wage growth this year, adding to inflationary pressure.

30 June 2022

European Data Response

Germany and Spain Flash Inflation (Jun.)

The fall in inflation in Germany and the increase in Spain in June largely reflect temporary factors and will not alter the consensus view at the ECB that interest rates need to be increased quite rapidly.

29 June 2022

European Data Response

EC Survey (June)

The decline in EC Economic Sentiment Indicator in June was not as bad as we had feared and paints a more upbeat picture than the PMIs published last week. Nevertheless, the survey also pointed to inflationary pressures remaining strong, which is likely to weigh on demand and sentiment further ahead.

29 June 2022

More from Jack Allen-Reynolds

European Economics Update

Case for rate hikes much stronger than in 2011

The ECB’s rate hikes in 2011 were a mistake, not just because they exacerbated the widening in peripheral bond spreads. Underlying inflation was subdued and policymakers were too concerned with acting pre-emptively to contain inflation expectations. They could hardly be accused of that this time! Based on the outlook for inflation, the case for normalising monetary policy is now much stronger.

16 May 2022

European Economics Update

Rising inflation expectations causing alarm

Policymakers at the ECB are becoming more concerned about inflation expectations, with professional forecasters, financial investors, consumers and firms all anticipating that the pace of price increases will continue to accelerate. This makes it more likely that the Bank will begin normalising policy soon. Markets Drop-In (11th May, 10:00 EDT/15:00 BST): We’re discussing our Q2 Outlook reports and what they say about the potential performance of bonds, equities and FX rates as inflation peaks in a special 20-minute briefing on Wednesday. Register now.

10 May 2022

European Data Response

German ZEW Survey (May)

The small rise in the ZEW measure of German investor sentiment in May left it still very low. And the current conditions index fell further, which is consistent with our view that the economy will contract in Q2. The Sentix sentiment index for May paints a similarly downbeat picture for the euro-zone as a whole. Markets Drop-In (11th May, 10:00 EDT/15:00 BST): We’re discussing our Q2 Outlook reports and what they say about the potential performance of bonds, equities and FX rates as inflation peaks in a special 20-minute briefing on Wednesday. Register now.

10 May 2022
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