The euro-zone’s impressive upturn looks set to continue apace as reduced political uncertainty, high levels of business confidence, and continued strong policy support allow investment to take off. Growth has also broadened across the region, with labour market reforms having positive effects in the previously weakest economies. Meanwhile, a lack of inflationary pressure has allowed the ECB to maintain a dovish stance and we doubt that interest rates will rise until late 2019. This has all made the economic expansion seem more sustainable and we have upgraded our forecasts to further above the consensus. Elsewhere, Swiss monetary policy will stay ultra-loose for longer and an associated depreciation of the franc should see the recovery resume. By contrast, we expect Sweden and the UK’s central banks to raise interest rates by more than markets assume as their economies surprise on the upside.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services