Europe Economics Update Ukraine crisis won’t cause euro-zone recession The Ukraine crisis will be a drag on the euro-zone economy due to its effect on trade with Russia and the impact of higher energy prices on household consumption. However, this will be cushioned by... 28th February 2022 · 3 mins read
Europe Economics Update Six questions on Ukraine and the euro-zone The escalation of the Russia-Ukraine conflict has increased uncertainty about the economic outlook for the euro-zone. While things are changing rapidly, at this stage we think the main effects will be... 24th February 2022 · 7 mins read
Europe Economics Update Ukraine crisis could add 1.5% to EZ inflation this year In an extreme scenario, the impact of the Ukraine crisis on energy prices could add up to two percentage points to the peak in headline euro-zone inflation this year, and one-and-a-half percentage... 23rd February 2022 · 4 mins read
Europe Economics Update Inflation will remain higher in euro-zone core Inflation differentials across the euro-zone are unusually wide, in large part due to differences in energy inflation. But we don’t expect this to last. In the coming years, we think that inflation... 22nd February 2022 · 4 mins read
Europe Economics Update Replay of 2017 French election fears unlikely this time French President Macron is on course to win re-election in April by a comfortable margin, and is likely to push for a lower tax burden and pension reform in his second term. His main rival Marine Le... 18th February 2022 · 3 mins read
Global Markets Update The outlook for German and Swiss Government bonds We think that the gap between the yields of 10-year German and Swiss government bonds will re-emerge over the next couple of years as the ECB tightens policy more quickly than the SNB. In view of the... 17th February 2022 · 3 mins read
Europe Economics Update The Ukraine crisis and the euro-zone revisited While the simmering tensions over Ukraine could keep euro-zone inflation higher for longer than most expect, we think that it is unlikely to put the ECB off plans to start normalising policy this year... 16th February 2022 · 4 mins read
Europe Economics Update Rising wage inflation will embolden ECB hawks The tightening of labour market conditions in the euro-zone is likely to help push hourly wage growth up over the next couple of years to more than 3% y/y by 2023. This will serve to strengthen the... 16th February 2022 · 4 mins read
Europe Economics Update Lessons from Europe’s past wage-price spirals While there are limits to the lessons we can draw from the past, Europe’s experiences since World War Two provide some guidance as to the outlook for wages and inflation. They suggest that the recent... 10th February 2022 · 4 mins read
Nordic & Swiss Economics Update Riksbank unlikely to buck the trend for much longer While the Riksbank largely stuck to its dovish stance this morning, the fact that three of the six members of the Executive Board entered reservations and favoured reducing the size of the balance... 10th February 2022 · 3 mins read
Europe Economics Update Will ECB tightening cause a fresh crisis? Any policy tightening by the ECB in 2022-23 will probably be too limited to cause major problems in the bond market. But if interest rates rise much further than we anticipate, that could trigger... 9th February 2022 · 4 mins read
Europe Economics Update How big a problem are higher interest rates for Italy? Our base case is that monetary tightening by the ECB results in a manageable rise in Italy’s government bond yields. We think it would take 10-year yields rising to 5% or more to bring debt... 9th February 2022 · 4 mins read
Nordic & Swiss Economics Update Stoltenberg is not the most logical of appointments Today’s appointment of Jens Stoltenberg as the new Governor of the Norges Bank is a slap in the face for the bus driver, plumber, and baker who had applied for the job, as well as the two thirds of... 4th February 2022 · 3 mins read
Europe Economics Update What explains January’s inflation surprise? Most of the surprise in January’s inflation data came from energy inflation. But core inflation was also unexpectedly strong. With underlying price pressures continuing to build, there is a good... 3rd February 2022 · 2 mins read
Europe Economics Update ECB turns hawkish and tees up 2022 rate hikes While the ECB did not change its policy settings today, President Lagarde more than made up for it in the press conference. We now think the ECB will decide in March to taper its asset purchases... 3rd February 2022 · 3 mins read
Europe Economics Update Portugal rebound to continue after election The Socialist Party’s victory in yesterday’s election means there will be no substantial change in economic policy, but the government should be more stable. In any case, Portugal’s economy is set to... 31st January 2022 · 4 mins read
