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Monetary Indicators Monitor (July)

Year-on-year money and lending growth has fallen sharply this year and we think it will decline further. With the subdued level of economic activity also weighing on consumer prices, we don’t think that money growth poses a significant upside risk to inflation.
Jack Allen-Reynolds Senior Europe Economist
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European Economics Update

Answers to your questions on the ECB

We held a Drop-In today to discuss our views on the ECB and what the chances are of a further hawkish surprise in the coming weeks. (You can see an on-demand recording here.) This Update answers several of the questions that we received, some of which we couldn’t answer during the event.

24 May 2022

European Economics Update

Rising interest costs add to pressure on EZ households

We estimate that euro-zone households’ debt interest payments will quadruple as a share of income over the next couple of years as the ECB raises its policy rate. This will put yet further strain on households which are already struggling with higher costs and as such weigh on economic growth. ECB Drop-In (24th May 10:00 ET/15:00 BST): Could the ECB deliver a hawkish surprise? Join economists from our Europe and Markets teams for a discussion about what to expect from the Bank’s tightening cycle, including the chances for a bumper hike in July or even an early move at next month’s meeting. Register now.

24 May 2022

European Data Response

Euro-zone Flash PMIs (May)

The small fall in the euro-zone Composite PMI in May suggests that activity is holding up better than we had feared. But the services rebound is likely to run out of steam amid high inflation and the drop in new orders bodes ill for industry. So GDP growth is still likely to be weak for much of this year. ECB Drop-In (24th May 10:00 ET/15:00 BST): Could the ECB deliver a hawkish surprise? Join economists from our Europe and Markets teams for a discussion about what to expect from the Bank’s tightening cycle, including the chances for a bumper hike in July or even an early move at next month’s meeting. Register now.

24 May 2022

More from Jack Allen-Reynolds

European Economics Update

Investment to make sizeable contribution to growth

Business surveys suggest that global supply problems are becoming a drag on euro-zone investment, but these problems should fade going into 2022. As long as the Delta variant doesn’t halt the economic recovery in its tracks, investment should make a sizeable contribution to GDP growth this year and next.

25 August 2021

European Data Response

Euro-zone Flash PMIs (Aug.)

August’s PMIs suggest that growth slowed only slightly despite persistent supply problems and activity approaching more normal levels. They also imply that price pressures are no longer intensifying, though they aren’t easing significantly either.

23 August 2021

European Economics Weekly

Delta variant not yet putting brakes on recovery

The timeliest data show little evidence that concerns about the Delta variant are causing economic activity to fall outright. But with output getting closer to normal levels and the virus situation potentially weighing on the recovery, we expect the first business surveys for August, published next week, to show a slowdown in the pace of growth. Meanwhile, next Thursday the ECB will publish the account of July’s policy meeting, which might reveal more detail on the range of views about the Bank’s new forward guidance.

20 August 2021
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