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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.
Jessica Hinds Senior Europe Economist
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European Data Response

German ZEW Survey (August)

The ZEW survey fell again in August and is at a level consistent with the economy contracting. We now think a recession is unavoidable in the second half of this year as the impact of high energy prices on both households and industry takes effect. Europe Drop-In (18th Aug.): Winter is coming to the European economy – but how harsh will it get? Join this special briefing on the economic impact of Russia’s gas supply threat. Register now.  

16 August 2022

European Economics Weekly

Energy crisis hotting up

The biggest problem in Europe’s energy markets is the reduction in Russia’s gas exports. But extreme weather conditions are compounding the problem by making life difficult for nuclear, hydro and coal-fired power plants. Next week, we expect to learn that employment increased slightly in the second quarter. Drop-In: Europe under siege – The economic impact of Russia’s gas threat Thursday, 18th August 10:00 ET/15:00 BST. Register now.

12 August 2022

European Economics Focus

Why we expect a euro-zone recession

We think the euro-zone will soon fall into recession as high inflation, tighter monetary policy and weak global growth take their toll. While the economy should recover next year, the rebound will be held back by a lack of policy support. What’s more, we think the biggest risks to our forecasts are to the downside, notably from Russia turning off the gas taps completely or the ECB failing to avert a sovereign debt crisis.

11 August 2022

More from Jessica Hinds

European Economics Update

Macron 2.0: pension reform and cost of living in focus

The re-election of French President Emmanuel Macron gives him five more years to improve France’s economic potential and its public finances, with pension reform and the green transition central to his plans. But Le Pen’s greater vote share suggests he will have to work hard to keep the electorate on side. Drop-In (Thurs., 14:00 BST): Nordic & Swiss – Shortly after the Riksbank meeting, economists from our Europe and Markets services will be online to discuss the monetary policy outlook for the region’s economies and currencies as the ECB turns hawkish. Register now.

25 April 2022

European Data Response

Euro-zone Flash PMIs (Apr.)

The rise in the euro-zone Composite PMI in April suggests that the services sector rebound from the Covid restrictions earlier in the year is offsetting weakness in the manufacturing sector. But with the surveys also signalling high inflation, we suspect GDP will fail to grow this year.

22 April 2022

European Economics Update

President Le Pen: seismic shift or five-year blip?

A win for Marine Le Pen would need to be followed by a strong showing for her party in June’s legislative elections if she is to implement most of her programme. A government of national unity or “cohabitation” would clip her wings, at least on domestic policy. So a Le Pen presidency might be less radical than many investors fear. That said, her election would highlight voters’ discontent with the EU. French election Drop-In (21st April, 09:00 BST/16:00 SGT): Join our Europe and Markets economists the morning after the crucial Macron vs Le Pen debate for a briefing about risks around the presidential election, including to the French economy, the European Union and the euro. Register now.

20 April 2022
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