Europe Economics Weekly Export-led recovery, higher ECB forecast Data released this week showed that the euro-zone’s recovery in the first quarter was mainly driven by exports, with domestic demand still subdued. Nevertheless, the recent stronger-than-expected... 7th June 2024 · 7 mins read
Europe Economics Weekly ECB to cut rates; SNB to sell FX assets? The key event next week will be Thursday’s ECB meeting when we think the Bank will cut the deposit rate from 4.0% to 3.75%. But strong services inflation in May and strong wage growth in Q1 may... 31st May 2024 · 7 mins read
Europe Economics Weekly Further thoughts on the latest wage data The wage growth data published this week were not good for the inflation outlook, but they weren’t as bad as they first appeared. Meanwhile, the latest news on economic activity has been encouraging... 24th May 2024 · 9 mins read
Europe Economics Weekly US-China tariffs raise stakes for EU This week’s decision by the US government to hike tariffs on Chinese EVs to 100% may have been largely political and symbolic but it raises the stakes for Europe, which will complete its own... 17th May 2024 · 8 mins read
Europe Economics Weekly ECB-Fed divergence; new CDU manifesto The Riksbank joined the club of European central banks that cut rates ahead of the Fed this week. The ECB is almost certain to follow suit in June and we think it would take a very big hawkish shift... 10th May 2024 · 8 mins read
Europe Economics Weekly Latest data support the case of the ECB’s doves Data released this week showed that euro-zone services inflation fell in April for the first time in five months. We think that the continued pass-through of lower energy costs and slower wage growth... 3rd May 2024 · 6 mins read
Europe Economics Weekly Recovery in activity won’t stop ECB rate cuts Survey data released this week suggest that the euro-zone is coming out of recession. But with activity still very weak and wage growth appearing to have eased so far this year, we remain comfortable... 26th April 2024 · 11 mins read
Europe Economics Weekly Oil and gas price spikes not likely to stop ECB cuts We think the risk of a large and sustained rise in energy prices is low so we remain happy with our forecast that the ECB will cut rates by 125bp this year. If energy prices were to jump very sharply... 19th April 2024 · 6 mins read
Europe Economics Weekly Euro weakness won’t stop the ECB, Italy fiscal worries The ECB gave a strong signal this week that it will cut rates in June. A later start to the Fed’s easing cycle or further weakness in the euro are unlikely to deter it. Meanwhile, Italy’s latest... 12th April 2024 · 7 mins read
Europe Economics Weekly Beware of the seasonal effects in inflation data Data released this week showed that the headline inflation rate in the euro-zone fell in March, to 2.4%, but that prices rose by 0.8% a monthly basis. However, the increase in prices was largely due... 5th April 2024 · 6 mins read
Europe Economics Weekly European fiscal strains getting worse It was revealed this week that France’s deficit in 2025 was much higher than expected, adding to concerns about Europe’s public finances. While the EU’s fiscal rules do not kick in until 2025, it now... 28th March 2024 · 10 mins read
Europe Economics Weekly Q1 stagnation, rate cut in June likely but not done deal Christine Lagarde’s comments this week suggest that a first ECB rate cut in June remains most likely but there is a significant risk that the easing cycle will start later. Meanwhile, surveys released... 22nd March 2024 · 6 mins read
Europe Economics Weekly ECB doesn’t need to wait for the Fed The ECB’s new operational framework, announced this week, doesn’t change the near-term outlook for monetary policy: we still expect the Bank to start cutting interest rates in June. And even though... 15th March 2024 · 6 mins read
Europe Economics Weekly Wage data point to June cut; worrying demographics Christine Lagarde’s comments following the ECB meeting and the Q4 wage data released this week support our view that the ECB will start cutting rates in June. Meanwhile, news that EU births fell to a... 8th March 2024 · 7 mins read
Europe Economics Weekly ECB patient, SNB eyeing early rate cut This week's data releases will have reinforced the view of ECB policymakers that they should be patient before beginning to loosen monetary policy. Indeed, the monthly pace of services inflation... 1st March 2024 · 7 mins read
Europe Economics Weekly Underlying inflation still a worry, more German gloom The recent increase in surveys of price pressures and the strong German wage figures released this week suggest there is still not enough evidence to convince the ECB that underlying inflationary... 23rd February 2024 · 9 mins read
