Russia’s political drama has triggered a flurry of speculation about how President Putin plans to wield power beyond the end of his term in 2024. We see nothing in this to change our downbeat long-term view on the economy but, in the near term, these events are likely to mark a shift to looser fiscal policy. Meanwhile, we doubt that the interest rate hikes in Central Europe that markets started to price in this week will materialise. Indeed, we think that interest rates will be cut in the Czech Republic by the end of the year.
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