Europe Economics Update Euro-zone food inflation to accelerate in 2027 In today’s press conference, Christine Lagarde expressed surprise at the decline in food inflation this year. This decline largely reflects past moves in agricultural commodity prices. But recent... 10th September 2026 · 3 mins read
Europe Economics Update ECB will hike again, but will be cutting next year There was no surprise at today’s rate hike by the ECB, but the Bank’s forecast revisions and President Lagarde’s remarks in the press conference suggest that policymakers are minded to raise rates... 10th September 2026 · 3 mins read
Europe Economics Update Rising EV exports won’t offset falling ICE sales The euro-zone’s exports of cars have fallen dramatically since 2017. This loss is driven by internal combustion engine vehicles, whereas exports of electric vehicles (EVs) are rising rapidly. Even if... 20th August 2026 · 3 mins read
Europe Economics Update Franc to rally when AI bubble bursts The bursting of the AI bubble that we suspect will happen next year, and the resulting pick-up in safe-haven demand, would most likely cause the franc to appreciate against the euro. 19th August 2026 · 3 mins read
Europe Economics Update Euro-zone headline inflation will soon rise to 3.5% The indirect effects of higher energy prices on core inflation in the euro-zone have been close to non-existent so far, but they are likely to build in the second half of the year. If energy prices... 19th August 2026 · 3 mins read
Europe Economics Update Energy-intensive industrial production set to fall further Production in the euro-zone’s most energy-intensive manufacturing sectors rose in March and April, despite the jump in oil and natural gas prices. This is because firms’ gas and electricity costs did... 13th August 2026 · 3 mins read
Global Economics Update Deciphering central banks’ muddled messages We recently hosted an online Drop-In to review the latest Fed, Bank of England and ECB decisions and what their communications imply. (Recording here.) This Update provides answers to the questions... 31st July 2026 · 7 mins read
Europe Economics Update Little macroeconomic impact of horrendous wildfires The wildfires that have been raging in France and Spain have already had a devastating effect on many businesses and there may be worse to come. However, their aggregate impact on GDP and the... 30th July 2026 · 3 mins read
Europe Economics Update ECB on pause but chance of another hike is rising The ECB left interest rates unchanged today and gave nothing away about its intentions for the next meeting in September. Based on our forecast for energy prices to fall significantly in the coming... 23rd July 2026 · 3 mins read
Global Economics Update What is the future of US tariffs? The “Section 122” global tariff imposed by the Trump administration after the Supreme Court struck down its IEEPA tariffs (including those from “Liberation Day”) in February will expire on Friday, to... 23rd July 2026 · 6 mins read
Global Economics Update Key lessons from the Iran war so far The Iran war has (already) lasted longer than we initially assumed in our base case but the disruption to energy markets and hit to the global economy have been more limited. This resilience will be... 21st July 2026 · 8 mins read
Europe Economics Update Euro-zone banks might be overdoing the pessimism The ECB’s Q2 Bank Lending Survey (BLS) was quite downbeat, but we suspect that both bank lending and GDP growth will continue to be stronger than this survey implies. This would be consistent with the... 21st July 2026 · 3 mins read
Europe Economics Update Indirect effects of energy prices still absent The rise in energy prices this month means that, rather than falling in July as seemed likely a fortnight ago, euro-zone inflation now looks set to remain unchanged at 2.8%. But the absence so far of... 17th July 2026 · 3 mins read
Global Economics Update What are the potential implications of Houthi attacks? Given reports of Houthi threats to close the Bab el-Mandeb passage to the Red Sea and to attack Saudi oil infrastructure, we are publishing an updated version of this note originally sent on 31st... 16th July 2026 · 4 mins read
Global Economics Update The implications of a renewed closure of the Strait The global economy has so far weathered the energy shock created by the war in Iran, but a sharp drawdown in oil inventories has left stocks close to critically low levels. The oil market therefore... 16th July 2026 · 5 mins read
Europe Economics Update The euro-zone’s “K-shaped” industry Industrial production has held up well since the Iran war began and output in the most energy-intensive sectors has risen. The bigger picture is that industry is in structural decline, but its... 15th July 2026 · 2 mins read
