The second estimate of euro-zone GDP confirmed that the economy stalled in Q4 last year and also revealed that domestic demand fell off a cliff. Data published so far this year point to continued stagnation, but we think a recession remains more likely than not as the impact of tighter monetary policy intensifies. Next week all eyes will be on the ECB where another 50bp hike seems to be a done deal. We suspect that policymakers will hint at further substantial rate hikes to come.
Euro-zone Drop-In (14th Mar.): How will recent data shape the ECB’s messaging at its March meeting? How high is it likely to push the policy rate to tame inflation? Register now for this 20-minute online preview of the meeting at 10:00 GMT/11:00 CET on Tuesday, 14th March. Register here.
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