Europe Economics Update Germany’s summer of reforms will do little for growth A range of reforms agreed in the past few weeks may shore up confidence in Germany’s government but they will not have much impact on economic growth. We are forecasting GDP to increase by around 0.7%... 14th July 2026 · 3 mins read
Europe Economics Update EU-China talks will not stop tariffs rising Recent EU initiatives aimed at slowing the rise in imports from China are unlikely to result in a radical change in approach. We think the EU will step up its trade defence measures gradually while... 9th July 2026 · 3 mins read
Europe Economics Update Immigration to continue driving Spain’s outperformance The scale of Spain's migrant regularisation scheme, for which 1.2 million people have applied, highlights the role that immigration is playing in Spain’s economic outperformance. We expect continued... 3rd July 2026 · 3 mins read
Europe Economics Update Heatwaves, climate change and euro-zone GDP The recent heatwave is further evidence that Europe is heavily exposed to climate change. We do not think this will impact GDP significantly this year. But over the long run it will dampen GDP growth... 2nd July 2026 · 3 mins read
Europe Economics Update Euro to weaken further against the US dollar Moves in relative interest rates have contributed to the euro weakening against the US dollar since early May. We think that it will fall to around $1.10 by the end of the year as the Fed hikes twice... 30th June 2026 · 3 mins read
Europe Economics Update German pension reform encouraging, but will take time Germany’s pension reforms should slow the rise in public sector pension spending a little, encourage people to remain in work for longer, and channel more savings into equities. But the benefits of... 29th June 2026 · 3 mins read
Europe Economics Update EZ fiscal policy moving from expansion to contraction Euro-zone governments look set to loosen fiscal policy by nearly half a percent of GDP this year, helping to cushion the blow to the economy from higher energy prices. But fiscal policy will be... 24th June 2026 · 3 mins read
Europe Economics Update No more ECB rate hikes? We have revised down our forecasts for oil and gas prices in light of developments in the Iran war and, as a result, are forecasting slightly lower inflation than we’d previously assumed. Our new base... 22nd June 2026 · 3 mins read
Europe Economics Update SNB rates will remain unchanged, all eyes on the franc The SNB left its policy rate unchanged at zero today and we think it will keep rates on hold over the next couple of years. Its commentary shows that the Bank is confident that the current monetary... 18th June 2026 · 3 mins read
Europe Economics Update Euro-zone inflation unlikely to rise much further May’s jump in services inflation was entirely due to Easter timing effects and higher jet fuel prices. Looking ahead, even if it takes some time for the flow of energy through the Strait of Hormuz to... 17th June 2026 · 3 mins read
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
