Europe Economics Update ECB likely to hike just once more While the ECB’s decision to leave rates unchanged was expected, the policy statement and President Lagarde’s remarks suggest to us that the Bank is becoming more confident that underlying inflation is... 29th October 2026 · 3 mins read
Europe Economics Update Weak credit demand adds to downside growth risks The ECB’s Q3 Bank Lending Survey showed credit standards tightening and demand weakening across most loan categories. This supports our view that GDP growth slowed to a crawl in Q3, while banks’... 27th October 2026 · 2 mins read
Europe Economics Update Why is France being singled out by bond markets? Rising interest rates and weak growth have made debt dynamics more challenging everywhere. What makes France stand out are the size of the fiscal adjustment needed to stabilise the debt ratio and the... 26th October 2026 · 3 mins read
Europe Economics Update How big are the contagion risks from France? France appears to be heading for a fiscal crisis which could lead to contagion and potentially a recession in the euro-zone. However, several factors mean the contagion risks to other countries’ bond... 19th October 2026 · 3 mins read
Europe Economics Update Euro-zone energy shock still much smaller than 2022 September’s euro-zone inflation data highlight that the energy shock is still much smaller than that in 2022, and the indirect effects of higher energy costs have so far been negligible. We suspect... 16th October 2026 · 3 mins read
Bonds Update French OATs will remain Euro-zone’s problem child We think the selloff in French OATs has further to run over the coming year and spreads could conceivably rise much further, perhaps to around 200bp, given that attempts to put France’s public... 16th October 2026 · 4 mins read
Europe Economics Update When would the ECB intervene in bond markets? Bond markets are a long way from needing ECB intervention – in the recent past, policymakers have only got twitchy when 10-year sovereign spreads were around 250bp. If spreads approached those levels... 13th October 2026 · 5 mins read
Europe Economics Update EU-China hybrid deal a potential blueprint for future The EU-China deal on plug-in hybrids is another step to strengthen EU trade defences and also offers a blueprint for future deals, but it is still consistent with the EU moving in a targeted and... 12th October 2026 · 3 mins read
China Economics Update China could weather tougher EU trade restrictions Even a sharp escalation in EU trade restrictions would have only a small impact on China’s economy. We estimate that an additional 20%-pt tariff on Chinese imports across strategically important... 9th October 2026 · 5 mins read
Commodities Update El Niño to reduce upside risks for EU natural gas prices By helping to limit heating demand and natural gas consumption in late-autumn and early-winter, an El Niño-driven warm start to the winter in Europe could reduce the extent to which European gas-users... 8th October 2026 · 4 mins read
Europe Economics Update First thoughts on Spain's snap election The outcome of Spain’s snap election on 29th November is uncertain, but opinion polls suggest that the centre-right People’s Party and far-right Vox are well placed to form a coalition. That would... 5th October 2026 · 4 mins read
Europe Economics Update Election worries will keep pressure on French bonds Global bond markets have taken a big hit in recent months, but French government bonds have been singled out. We think this makes sense given the widening fiscal deficit and the growing risks around... 24th September 2026 · 3 mins read
Europe Economics Update SNB likely to sit this tightening cycle out The SNB’s decision to leave interest rates on hold today was in line with economists’ and investors’ expectations. But in contrast to the prevailing view in the market that the Bank will hike rates at... 24th September 2026 · 3 mins read
Europe Economics Update Energy-driven inflation won’t force the SNB’s hand We think that the SNB will leave its policy rate unchanged at next week’s meeting. While higher energy prices have pushed inflation higher, underlying price pressures are weak and inflation is set to... 17th September 2026 · 4 mins read
Europe Economics Update Euro-zone inflation to hit 4% by December We forecast headline inflation in the euro-zone to jump from 3.2% in August to 3.8% in September. And we think that increases in energy, food and core inflation will push it up to 4% by December. But... 17th September 2026 · 3 mins read
Europe Economics Update AI having a small impact on EZ productivity growth Growth in output and productivity in the euro-zone’s information and communication sector is very strong by historical standards, no doubt reflecting the impact of AI. However, so far there is no... 15th September 2026 · 3 mins read
