Europe Economics Update SNB set to look through energy price shock Despite the ECB’s rate hike today, we think the SNB will leave its policy rate unchanged at zero next week. Higher energy prices have already pushed up energy inflation but overall inflation remains... 11th June 2026 · 4 mins read
Europe Economics Update The ECB is not done yet After the ECB raised interest rates by 25bp today, taking the deposit rate to 2.25%, Christine Lagarde gave nothing away about the Bank’s likely next move in the press conference. We might learn more... 11th June 2026 · 3 mins read
Europe Economics Update Euro-zone bank lending likely to slow soon Lending by euro-zone banks held up well in the first two months after the Iran war began. But with confidence low, market interest rates rising and the ECB set to start tightening monetary policy next... 1st June 2026 · 2 mins read
Europe Economics Update How big is the fiscal cost of the Iran conflict? Since the outbreak of the Iran war we have increased our forecast for the aggregate euro-zone fiscal deficit this year from around 3% to 3.5% of GDP. Increased borrowing is not a major worry for... 29th May 2026 · 5 mins read
Europe Economics Update Italy growing slowly but jobs market will remain tight Italy’s unemployment rate has fallen to its lowest level since the mid-1970s, but recent declines have been driven by young people leaving the labour force rather than rising employment. Even if the... 28th May 2026 · 2 mins read
Europe Economics Update Should we be braced for second-round effects? ECB policymakers have pointed to second-round effects in the labour market as a key indication that they would need to tighten monetary policy. As things stand, we suspect that wage inflation will... 20th May 2026 · 5 mins read
Europe Economics Update Inflationary effects of Iran war are set to broaden Higher energy costs have pushed up fuel prices in the euro-zone while the impact on other components of the consumer price basket has so far been very small. But the inflationary effects of the Iran... 20th May 2026 · 3 mins read
Commodities Update Seasonal dynamics to support natural gas prices in H2 The fact that Asian buyers of LNG from the Middle East have so far curtailed demand has helped to limit the upward pressure on natural gas prices. But even if the Strait of Hormuz reopens soon, a... 19th May 2026 · 4 mins read
Europe Economics Update US tariffs have hit euro-zone exports The front-running of US tariffs gave a small boost to euro-zone exports and GDP last year. But now that the dust is settling, euro-zone exports to the US are significantly lower than they were before... 19th May 2026 · 4 mins read
Global Economics Update Assessing the effects of an extreme war scenario In this Update, we explore an extreme scenario in which the Iran war escalates beyond the assumptions in our published baseline and adverse scenarios. With Brent crude jumping higher and staying at... 14th May 2026 · 7 mins read
Europe Economics Update Euro-zone less reliant on fossil fuels than in 2022 The euro-zone’s declining reliance on fossil fuels – driven by lower overall energy demand and a shift towards renewables – means that the economy is becoming less sensitive to higher fossil fuel... 13th May 2026 · 2 mins read
Europe Economics Update Which sectors are suffering most from the China shock? The euro-zone has been one of the biggest losers from China eating up a larger share of the global export market. It has lost market share across a wide range of industries including vehicles... 11th May 2026 · 3 mins read
Europe Economics Update Italy: fiscal risks rising After three years of remarkable stability in Italy, a decline in Prime Minister Giorgia Meloni’s popularity and higher energy prices mean political and fiscal risks are rising again. 7th May 2026 · 4 mins read
Europe Economics Update Gas prices and European competitiveness The increase in European gas prices caused by the Iran war has been much smaller than in 2022 but it will make European industry less competitive compared to the US. Within Europe, it will weigh on... 1st May 2026 · 3 mins read
Europe Economics Update Lagarde prepares the ground for rate hikes While today’s decision to leave the ECB deposit rate at 2.0% was expected, President Lagarde used the press conference to signal that interest rates will rise. Unless there is a big drop-back in... 30th April 2026 · 3 mins read
