Euro-zone driver shortages less acute than in the UK

The shortage of heavy goods vehicle (HGV) drivers in the euro-zone appears to be nowhere near as acute as in the UK. We therefore don’t expect to see a surge in drivers’ wages that would lead to widespread upward pressure on pay throughout the euro-zone labour market. What next for the ECB? We’re hosting a post-mortem after Thursday’s Governing Council meeting at 1100 ET to discuss its decision and our views on the euro-zone’s economic and inflation outlook. Register here.
Jessica Hinds Europe Economist
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European Economics Weekly

ECB rate hikes a distant prospect, Merkel era at an end

Even as other central banks hinted this week at a shift towards tighter monetary policy, we doubt that the ECB will follow suit. Meanwhile, the business surveys suggested that while supply-chain disruptions and rising input prices took the shine off the region’s recovery in September, GDP probably still grew very strongly in Q3. Next week brings the results of Germany’s federal election on Sunday and the start of probably lengthy coalition negotiations and the usual month-end raft of data.

24 September 2021

European Data Response

German Ifo Survey (September)

The third successive decline in the Ifo Business Climate Index in September provides further evidence that Germany’s recovery is losing steam, as supply chain difficulties persist and the surge in gas prices piles additional pressure on prices and production. That said, we still expect strong GDP growth in Q3, given the low base at the start of Q2.

24 September 2021

European Economics Update

Five questions and answers about Germany’s election

The federal election in Germany on Sunday will result in a new chancellor for the first time since 2005 and opinion polls suggest that the result will be extremely close with potentially months of coalition talks ahead. In this Update, we answer five key questions about the election.

23 September 2021

More from Jessica Hinds

European Data Response

EZ Unemployment (Jul.) & Final Mfg PMIs (Aug.)

The fall in euro-zone unemployment in July appears to be down to a decline in the overall labour force rather than an increase in employment, highlighting that the labour market recovery still has a long way to go. But with hiring activity increasing, the jobless rate should continue to fall.

1 September 2021

European Economics Focus

Getting a handle on euro-zone wage data

Euro-zone wage data are published only quarterly, and with a long lag, and have been distorted by pandemic-related effects. So it will be another six months before we get a clearer idea of the underlying trend in earnings. For now, though, measures of spare capacity suggest that wage growth is likely to remain around 2.0-2.5%, which has in the past not been enough to push consumer price inflation to 2%.

31 August 2021

European Economics Weekly

Business surveys point to continued recovery

The business surveys for August published this week provided some reassurance that the euro-zone economy is continuing to grow at a decent pace. And the decline in the forward-looking components is not too worrying since the pace of growth was always likely to tail off as the economy got closer to "normal". Next week, we expect flash inflation data for August to show big rises in the headline and core rates, due to base effects related to the timing of summer sales last year.

27 August 2021
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