Nordic & Swiss Economics Update Strong franc is not the key to low Swiss inflation In our view, the Chairman of the SNB has over-stated the role of the exchange rate in explaining why inflation has remained so comparatively low in Switzerland in the past two years. However... 1st March 2023 · 4 mins read
Europe Economics Update Pandemic savings won’t rescue the economy The value of savings that households built up during the pandemic has been wiped out by inflation. Rising interest rates, together with a desire to rebuild the spending power of their savings, suggest... 28th February 2023 · 3 mins read
Europe Economics Update Money and lending data point to recession The effects of tighter monetary policy are clear in the money and credit data. Households and firms have continued to lock their money up in longer-term deposits which are less likely to be spent, and... 27th February 2023 · 2 mins read
Industrial Metals Update Europe metals supply battered, but not entirely broken The sharp fall in European electricity prices sets the stage for a recovery in metals output across the region. As power prices are still historically high and unlikely to fall that much further... 22nd February 2023 · 4 mins read
Europe Economics Update Construction output likely to keep falling The euro-zone’s Composite PMI was much stronger than expected in February, but it excludes the construction sector where prospects are weaker. Tighter financial conditions and softer demand in the... 21st February 2023 · 4 mins read
Nordic & Swiss Economics Update Property slump leading Sweden into recession Swedish house prices have fallen 18% from their peak and could drop by a further 5% or so from here. This should not cause significant financial stability problems but will be a major drag on economic... 21st February 2023 · 4 mins read
Nordic & Swiss Economics Update Riksbank minutes confirm hawkish shift, focus on SEK The minutes of the Riksbank’s latest policy meeting show that the previously dovish Executive Board members have become less so, and that the new members are on the hawkish side. That reinforces our... 20th February 2023 · 3 mins read
Europe Economics Update French wage growth to remain strong We think French wage inflation will remain much stronger than in the pre-pandemic period this year. This is not least because of the automatic adjustments to inflation of the minimum wage and... 16th February 2023 · 4 mins read
Nordic & Swiss Economics Update Norges Bank’s policy rate to rise above 3% The resilience of the economy and house prices, together with the strength of inflation, suggest that the Norges Bank will raise interest rates a bit further than we previously anticipated. We now... 15th February 2023 · 3 mins read
Nordic & Swiss Economics Update Governor Thedéen puts his foot on the brakes The Riksbank’s 50bp rate hike today was expected but the decision to begin actively selling government bonds and the emphasis on the exchange rate were a surprise. Possibly this simply reflects the... 9th February 2023 · 3 mins read
Europe Economics Update ECB deposit rate still set to reach 3.5% Whereas the Bank of England and (arguably) the Fed delivered dovish surprises over the past twenty four hours, we think the ECB decision did not amount to a clear change of policy stance. The ECB is... 2nd February 2023 · 3 mins read
Europe Economics Update New euro-zone forecasts: recession and slow recovery We think that the euro-zone will enter a recession in the first half of this year and then experience a slow recovery. Our new GDP forecasts show a 0.5% contraction in 2023 and growth of only 0.8%... 31st January 2023 · 3 mins read
Europe Economics Update Get ready for a German inflation surprise in January The reversal of temporary subsidies and changes to weightings will probably push headline German HICP inflation back up in January. But the bigger picture remains that the headline rate will fall... 27th January 2023 · 3 mins read
Europe Economics Update Lending weak and savers locking up their cash December’s euro-zone money and credit data show that the effects of rising interest rates were starting to be felt. Households and firms shifted their money into longer-term deposits which are less... 27th January 2023 · 2 mins read
Europe Economics Update Be wary of the Spanish inflation data A closer look at Spain’s inflation data shows that there are significant measurement difficulties affecting both energy and core price data. However, we still expect measured headline inflation to... 24th January 2023 · 2 mins read
Europe Economics Update Germany to avoid industrial recession We now think German industry will continue to grow in the coming months as lower gas prices, easing supply shortages and high backlogs of orders support production. 20th January 2023 · 4 mins read
