Our Europe Chart Pack has been updated with the latest data and our analysis of recent developments.
Recent data suggest that the euro-zone economy contracted in Q3 and we expect it to shrink further in Q4 and manage only a weak recovery next year. Inflation has fallen sharply in recent months and further declines lie ahead. But the labour market will remain tight, keeping wage growth fairly high, and encouraging the ECB to keep its deposit rate at 4.0% until the second half of next year. Meanwhile, we expect Riksbank and Norges Bank to raise rates once more in this cycle, and forecast the Swiss National Bank to begin cutting rates before the ECB.
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