Europe Economics Weekly Don’t expect a strong rebound in Germany The German government’s reduction in its forecast for GDP growth from 1.3% to 0.2% brings it closer to our long-held view that the economy will not grow at all this year. But there are growing risks... 16th February 2024 · 7 mins read
Europe Economics Weekly ECB policymakers view patience as a virtue ECB policymakers have continued to push back against the prospect of rate cuts this spring. But they won't feel bound by that guidance if their assessment of the inflation outlook changes. So we still... 9th February 2024 · 7 mins read
Europe Economics Weekly The “greedy beast” may be tamed but not slayed Tentative signs of an increase in services press pressures support the view of ECB policymakers who are concerned about the strength of domestic inflation. We still think that the data will support an... 2nd February 2024 · 7 mins read
Europe Economics Weekly Misinterpreting the ECB Most commentators and investors have concluded that yesterday’s ECB meeting signalled that an April rate cut is a near certainty. We disagree. While an April rate cut is still our base case, the risks... 26th January 2024 · 9 mins read
Europe Economics Weekly Swiss policymakers may cut rates before ECB ECB policymakers have set out their stall ahead of next Thursday’s meeting and will continue to push back against expectations of early rate cuts – notwithstanding mounting evidence that the economy... 19th January 2024 · 6 mins read
Europe Economics Weekly Policymakers start the year talking about rate cuts In their first comments of 2024, ECB policymakers acknowledged that the next interest rate move is likely to be a cut, though they emphasised the need for greater certainty on inflation before going... 12th January 2024 · 7 mins read
Europe Economics Weekly Weak end to last year does not bode well Data released this week showed that core price pressures in the euro-zone continued to fade at the end of last year as activity remained subdued. This supports our view that a weak economy this year... 5th January 2024 · 9 mins read
Europe Economics Weekly ECB behind the curve; new EU fiscal rules The latest core inflation data suggest that ECB policymakers will be forced to cut interest rates sooner than they currently think. Meanwhile, the EU has agreed new budget rules, but we suspect that... 21st December 2023 · 7 mins read
Europe Economics Weekly Europe’s central banks push back against rate cut bets In contrast to the Fed, the ECB pushed back this week against expectations that it would start to cut interest rates in early 2024. But we still think that a weak economy and continued declines in... 15th December 2023 · 5 mins read
Europe Economics Weekly Why we’ve changed our ECB view We had been expecting next Thursday’s ECB meeting to be another non-event, but it now looks likely to provide some idea of how soon and how fast policymakers are willing to start cutting interest... 8th December 2023 · 8 mins read
Europe Economics Weekly Revising our ECB forecast, German fiscal space In light of this week’s data releases we are bringing forward our forecast for the first ECB rate cut to June next year and now think the deposit rate will fall from 4% currently to 3% by the end of... 1st December 2023 · 7 mins read
Europe Economics Weekly Fiscal policy adds to headwinds Euro-zone governments have been tightening fiscal policy this year and will continue doing so in 2024 – all the more so if Germany chooses to make some additional expenditure cuts in response to the... 24th November 2023 · 10 mins read
Europe Economics Weekly Germany’s constitutional court strikes again The constitutional court ruling that the German government's use of off-budget funds is unlawful is another headache for the ruling coalition in Berlin. However, we doubt that it will result in as... 17th November 2023 · 7 mins read
Europe Economics Weekly Revolving doors on the Iberian peninsula The resignation of Portuguese Prime Minister António Costa and news of a coalition government being formed behind incumbent Spanish PM Pedro Sánchez this week could shift the two economies’ relative... 10th November 2023 · 7 mins read
Europe Economics Weekly ECB rate cuts still a long way off, fiscal rules debate This week’s comments by ECB officials, as well as signs that underlying inflationary pressures in the euro-zone remain strong, support our view that the first ECB rate cut will only come in the second... 3rd November 2023 · 8 mins read
Europe Economics Weekly ECB on a high, Riksbank seeking bailout This week’s decision by the ECB to leave interest rates on hold is likely to be the first of many – we think rates will remain at their current levels until the second half of next year. Meanwhile... 27th October 2023 · 10 mins read
