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Euro-zone GDP & Employment (Q1)

The euro-zone economy grew slightly faster in Q1 than previously estimated and there was a solid increase in employment at the start of the year too. While we expect the labour market to remain a relative bright spot, the slowdown in activity that we expect this year will act as a headwind.
Jessica Hinds 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 Jessica Hinds

European Economics Weekly

ECB more hawkish as investors rein in rate hike bets

The ECB’s hawkish conversion appears to be all but complete, with more officials this week joining the ranks of those calling for rates to rise in July and expressing a clear desire to get the deposit rate out of negative territory this year. That leaves the Bank consistent with our own call since March and that of investors. But worries about weaker growth means investors are now paring their expectations for rates next year and beyond. Next week, we expect data to confirm the small increase in euro-zone GDP in Q1 and show that employment also rose, while we will also be watching closely the minutes of the April ECB meeting.

13 May 2022

European Economics Update

Wage pressures intensify amid high inflation

The current bout of high inflation is influencing wage negotiations in the euro-zone and stronger pay growth this year seems all but guaranteed, reinforcing the ECB’s resolve to normalise policy. But as things stand, a wage-price spiral still looks unlikely.  

11 May 2022

European Economics Update

Gas price cap won’t solve Spain’s inflation problem

The cap on the wholesale natural gas price for the Iberian market will result in a bigger fall in energy inflation in Spain than we had previously expected. It might also dampen underlying price pressures, but the big picture is that core inflation will remain very high despite the weak post-Covid economic recovery.

28 April 2022
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