Europe Economics Update Energy prices still a headwind for Germany European natural gas prices have fallen a long way from their 2022 peaks and the possibility of another energy crisis this winter now looks remote. However, prices are still much higher than they were... 27th October 2023 · 4 mins read
Europe Economics Update Norges Bank’s tightening cycle likely to be over Norges Bank is almost certain to leave its policy rate unchanged at 4.25% next week. And we suspect that, given September’s weak inflation data, it will also soften its language about implementing one... 26th October 2023 · 3 mins read
Europe Economics Update ECB policy rates at a plateau Following today’s decision to leave interest rates on hold, the ECB’s tightening cycle appears to be over. We think that rates will stay at their current levels well into next year. The Governing... 26th October 2023 · 3 mins read
Europe Economics Update Lending data remain consistent with recession The euro-zone money and credit data have been very weak all year and September’s data, released this morning, were more of the same. The activity surveys are now turning downwards too, supporting our... 25th October 2023 · 4 mins read
Europe Economics Update Weak external sector adds to euro-zone’s woes We expect euro-zone export growth to remain weak in the coming months against a backdrop of slow economic growth in key export markets and a stronger euro. 24th October 2023 · 2 mins read
Europe Economics Update Raising our long-run ECB interest rate forecast We have recently published detailed analysis arguing that equilibrium interest rates in advanced economies are now higher than they were before the pandemic, and that they will continue to rise over... 17th October 2023 · 3 mins read
Europe Economics Update Stable Swiss politics supports the economic outlook Switzerland’s government looks set to remain largely unchanged after the federal elections this Sunday, and we do not expect a significant change in economic policy. But voters’ grievances about the... 17th October 2023 · 3 mins read
Europe Economics Update Rise in Spanish inflation will not worry the ECB Spanish inflation doubled from 1.6% in June to 3.2% in September and is likely to rise to over 4% by the end of the year. However, ECB policymakers won’t be too concerned as the increase is largely... 13th October 2023 · 4 mins read
Europe Economics Update Digital euro still a distant prospect There may be more political support for the creation of a Central Bank Digital Currency (CBDC) in the European Union than in some other economies. However, it is still uncertain whether it will ever... 11th October 2023 · 5 mins read
Europe Economics Update How worried should we be about Italy’s public debt? The recent shift towards looser fiscal policy in Italy and increase in sovereign bond yields once again have raised concerns that investors may lose confidence in Italy’s ability to sustain its debt... 9th October 2023 · 3 mins read
Global Economics Update The bond market sell-off and the global economy The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous... 4th October 2023 · 6 mins read
Europe Economics Update Investment downturn to push euro-zone into recession The resilience of investment in the euro-zone to higher interest rates and slowing economic growth at the start of the year appears to have been driven in part by the gradual clearing of backlogs in... 4th October 2023 · 4 mins read
Europe Economics Update ECB likely to end PEPP reinvestments early We suspect that before the end of the year, the ECB will announce that it will end PEPP reinvestments before the end of 2024. This would allow the ECB to shrink its balance sheet more quickly and... 2nd October 2023 · 3 mins read
Europe Economics Update Italy deficit projections: worry but don’t panic The Italian government’s decision to raise its deficit targets suggests it is trying to get away with as little fiscal tightening as possible. With EU fiscal rules set to come back into force next... 29th September 2023 · 3 mins read
Europe Economics Update Lending data point to recession The latest euro-zone money and credit data show that tighter ECB policy is continuing to weigh on households’ and firms’ borrowing, as well as influencing what they do with their savings. The weakness... 27th September 2023 · 2 mins read
FX Markets Update Taking stock of the European G10 currencies With most European G10 central banks now at, or very close to, the ends of their tightening cycles, this note examines where the European G10 currencies stand and how we see the outlook for the main... 22nd September 2023 · 5 mins read
