Global Economics Focus Introducing our new financial conditions indices (FCIs) We have revamped our financial conditions indices (FCIs) for DM economies. This document sets out a framework for analysing financial conditions, explains our methodology, presents and interprets our... 18th April 2023 · 20 mins read
Europe Economics Focus ECB’s balance sheet run-off should be smooth Quantitative tightening and the repayment of TLTROs mean that the ECB’s assets are likely to decline by around one quarter by the end of 2024. We expect the repayment of TLTROs to have a negligible... 20th February 2023 · 17 mins read
Europe Economics Focus Rise of fixed-rate loans makes ECB’s job harder The shift away from variable towards fixed-rate mortgages in many European countries over the past 15 years means that it will take longer than in the past for interest rate hikes by the ECB to feed... 23rd January 2023 · 11 mins read
Europe Economics Focus Core inflation will stay above 2% until 2025 Next year will be characterised by falling headline inflation, which should help to prevent interest rate expectations and bond yields from rising much further. But we also expect core inflation to... 17th November 2022 · 13 mins read
Europe 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... 11th August 2022 · 12 mins read
Europe Economics Focus How big is the threat of an end to Russian gas exports? An end to Russian gas exports to Europe would prompt us to forecast a deeper recession in the euro-zone this winter than we currently anticipate. The hit would come partly through higher inflation... 9th August 2022 · 21 mins read
Europe Economics Focus Euro-zone core inflation will remain higher for longer We are revising up our forecast for core inflation in the euro-zone because the labour market is tighter, demand stronger and inflation expectations higher than we had anticipated. Moreover, fiscal... 27th June 2022 · 14 mins read
Europe Economics Focus Low equilibrium rates will limit ECB policy tightening Equilibrium real interest rates in the euro-zone appear to be below zero and lower than in most other advanced economies. We expect them to stay that way. While the ECB is likely to raise interest... 3rd May 2022 · 13 mins read
Europe Economics Focus Growing risk of Le Pen upset to Macron re-election bid This month’s French presidential election no longer looks like the shoo-in for incumbent Emmanuel Macron that it did only a few weeks ago. Right-wing nationalist Marine Le Pen’s chances have risen... 8th April 2022 · 20 mins read
Europe Economics Focus The fiscal cost of the Ukraine war We estimate that euro-zone governments’ fiscal deficits will be around 1% higher than expected this year, as a result of the war in Ukraine, mostly due to government subsidies for energy, support for... 29th March 2022 · 15 mins read
Europe Economics Focus ECB will persist with QE and negative rates for years We expect the ECB to interpret a period of above-target inflation as “transient” even if it lasts for well over a year. Although it will end its emergency PEPP programme next March, the Bank will step... 15th November 2021 · 25 mins read
Nordic & Swiss Economics Focus Fossil-like Norway won’t go the way of the dinosaurs The UN’s annual climate change conference, COP26, will not have any discernible impact on Norway’s intention to keep pumping oil and gas over the coming decades. The irony is that Norway’s success in... 10th November 2021 · 13 mins read
Nordic & Swiss Economics Focus Riksbank to take a chance on “QT” next year Housing market valuations in Sweden are even more stretched than on past occasions when the Riksbank has “leant against the wind” – that is, set policy tighter than needed to contain consumer price... 1st September 2021 · 17 mins read
Europe Economics Focus Getting a handle on euro-zone wage data Euro-zone wage data are published only quarterly, and with a long lag, and have been distorted by pandemic-related effects. So it will be another six months before we get a clearer idea of the... 31st August 2021 · 14 mins read
Europe Economics Inflation won’t surge in the euro-zone like in the US We think that euro-zone headline inflation will rise further than most expect in the second half of this year. But rather than reaching the levels of around 5% seen in the US, it is likely to top out... 27th July 2021 · 12 mins read
Europe Economics Focus Labour market recovery won’t spark wage spiral We estimate that the spare capacity in the euro-zone’s labour market has increased by around four million people, or 2.5% of the labour force, since the start of the pandemic. This is likely to... 9th June 2021 · 20 mins read
