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Jump in inflation will discourage Riksbank from further cuts Both headline and core inflation rose in June by much more than Riksbank officials had forecast at its meeting last month, supporting our view that the Riksbank will keep the policy rate at 2% …
7th July 2025
Output still resilient to tariffs The better-than-expected German industrial production figures for May are partly due to continued tariff front-running in the pharmaceuticals sector, but output in other sectors is also proving more resilient to tariffs …
This page had been updated with additional analysis. Inflation rises, but will remain very weak this year Headline inflation rose slightly in Switzerland in June, but we expect it will remain around zero, or just below, for the rest of the year. …
3rd July 2025
Inflation at the target and likely to remain quite stable The small increase in headline inflation in the euro-zone in June will not change the debate among ECB policymakers about whether there should be one more interest rate cut in the current cycle. …
1st July 2025
June inflation figures will please ECB National data published so far suggest that both euro-zone headline and core inflation were little changed and close to 2% in June. That will please ECB officials, who we expect to cut rates one more time in this …
30th June 2025
Activity weak and some signs of tariff drag The ESI for June suggests that US tariffs may be starting to drag on euro-zone activity and that the economy remains weak. Meanwhile, Middle-east tensions do not appear to have raised perceived uncertainty. The …
27th June 2025
German economy resilient to tariffs so far, but activity still weak The rise in the Ifo BCI in June suggests that activity in Germany has not yet been meaningfully hit by US tariffs. But output remains weak and we think a proper recovery will only …
24th June 2025
Economy stagnating, no sign yet of higher energy costs raising prices June’s flash PMI survey for the euro-zone was consistent with the economy flat-lining. The recent jump in energy costs has not yet fed through to output prices, but the uncertainty …
23rd June 2025
Surprise cut by Norges Bank but no rush to cut again Norges Bank’s surprise decision to cut its policy rate to 4.25% today – the first in this cycle – is not a sign that policymakers are suddenly in a rush for much looser monetary policy. We expect a very …
19th June 2025
SNB will cut rates again later this year The SNB decision to cut by just 25bp today means that it has avoided negative rates for the time being. But we think that continued deflation over the coming months will prompt policymakers to cut again at their …
Riksbank cuts, but will probably not cut again While the Riksbank cut its policy rate by 25bp this morning and suggested there was a reasonable chance of a further cut this year, the outlook is uncertain and underlying economic conditions aren’t quite as …
18th June 2025
Euro-zone GDP and Employment (Q1 2025) Front-running boost will be unwound in second quarter The upward revision to euro-zone Q1 GDP growth to 0.6% q/q from 0.3% is largely due to a surge in pharmaceutical exports which we already know is being reversed …
6th June 2025
Tariff front-running already reversing German industrial production and export figures for April suggest that the boost to activity from US tariff front running is already reversing and that underlying industrial activity remains weak. With US tariffs …
ECB likely to cut further The ECB’s decision to cut the deposit rate by 25bp to 2.0% and give no clear signals about the future path of monetary policy was in line with expectations. We forecast one more rate cut in the second half of the year with risks …
5th June 2025
Updated Q1 Ireland data to prompt massive revision to euro-zone outturn We think that the huge upward revision to Ireland’s Q1 GDP data this morning, to show a rapid expansion that was in large part driven by tariff front-running, will lead to euro-zone …
Services inflation down and further declines to come May’s steep decline in services inflation, to its lowest level in more than three years, confirms that the previous month’s jump was just an Easter-related blip and that the downward trend in services …
3rd June 2025
Economy weak, inflation expectations eased May’s euro-zone business and consumer survey from the European Commission shows a small improvement in sentiment, but the data are still consistent with the economy struggling. And the price expectations indices …
27th May 2025
US-EU brinkmanship highlights risks President Trump’s threat of a 50% tariff from 1 st June may well turn out to be a negotiating tactic and seems very unlikely to be where tariffs settle over the long run. But if it were implemented it could result in a …
23rd May 2025
Small boost from tariff front-running not enough to stop economy stalling This page has been updated with additional analysis since first publication. The euro-zone’s flash PMIs for May suggest that manufacturing output continues to be supported by the …
22nd May 2025
This page has been updated with additional analysis since first publication. GDP growth likely to slow again Euro-zone GDP growth was revised down to 0.3% q/q in Q1 but the underlying picture was weaker than this and we expect growth to slow again the …
15th May 2025
Bumper growth suggests SNB will cut by just 25bp next month Switzerland’s GDP growth shocked to the upside in the first quarter and grew by 0.7% q/q, shaking off concerns that trade uncertainty would weigh on the economy. This means the SNB is more likely …
Riksbank leave rates unchanged, but signals cuts may be coming While the Riksbank left its policy rate unchanged at 2.25% today, policymakers indicated that a rate cut is likely this year given the weakness of the economy. We now think that they are …
8th May 2025
Rebound in German industry unlikely to last The big rise in German industrial output and orders in March confirms that conditions in the sector have stabilised in recent months. However, some of the strength might be due to tariff front running. And with …
Retail sales edged down in March This publication has been updated with additional analysis Euro-zone retail sales declined in March, reversing part of the increase in February. We expect spending growth to remain weak for the rest of the year as any …
7th May 2025
Inflation lower than expected, but the core rate to remain high for rest of year Sweden’s CPIF inflation was unchanged in April which will give the Riksbank little cause for concern going into its policy decision tomorrow. We expect it to keep the policy …
Merz significantly weakened by first round election failure The failure of CDU leader Friedrich Merz to be elected Chancellor in the first round of voting will probably not prevent him and the Grand Coalition from taking power in the coming days or weeks. …
6th May 2025
Easter-driven rise in services inflation won’t concern ECB April’s rise in services inflation is unlikely to worry the ECB too much as it was probably driven mainly by Easter timing effects. We think services inflation will start falling again in the …
2nd May 2025
Euro-zone inflation probably unchanged in April, but will fall further this year National data published so far suggest that euro-zone inflation remained at 2.2% in April, and that core inflation probably rose from 2.4% to 2.6%. (Euro-zone data due on …
30th April 2025
Strong start to the year but tariff-induced slowdown ahead The acceleration in euro-zone GDP growth in Q1, to 0.4% q/q, suggests the economy started the year on a stronger footing than we expected and activity surveys suggested. Nevertheless, we still …
This publication has been updated with additional analysis ESI points to small hit from tariffs in April The ESI for April point to a small hit to the euro-zone from US tariffs in April and suggest that growth remained quite weak. With the drag from …
29th April 2025
Spain’s economy to stay strong this year, but Sweden’s may struggle Spain’s rapid economic growth (+0.6% q/q in Q1) is likely to continue for some time yet, despite trade uncertainty. While consumption and government spending were weaker than expected in …
Ifo resilient in the face of tariffs The rise in the Ifo Business Climate Index (BCI) in April suggests that US tariffs have not yet meaningfully hit economic activity in Germany, though some sentiment indicators have fallen sharply. But the economy is …
24th April 2025
Hit from tariff chaos looks small so far but could get bigger April’s euro-zone flash PMIs suggest that the immediate damage to production from US trade policy has been limited so far. But firms reported some front-loading of orders, so output might take …
23rd April 2025
ECB acknowledges downside risks from trade uncertainty While the ECB’s decision to cut its deposit rate from 2.5% to 2.25% today was expected, the monetary policy statement clearly points to further policy easing to come. The statement says the outlook …
17th April 2025
Outlook clouded by tariff tensions This publication has been updated with additional analysis The increase in euro-zone industrial production for a second consecutive month in February is not a sign of a sustained recovery for the sector. Instead, it is …
15th April 2025
Retail sales picked up in February This publication has been updated with additional analysis Euro-zone retail sales rose in February for the first time since September last year, and we expect consumer spending to grow at a modest pace over the coming …
7th April 2025
German industry already weak of tariff hit The fall in German industrial production in February left it very weak. With US demand generating around 7% of German manufacturing value added, the sector will be hit hard by US tariffs. And higher defence and …
Underlying inflation to remain elevated for the rest of the year Despite easing in March, CPIF inflation excluding energy remained elevated and is likely to remain high throughout this year. We are forecasting the Riksbank to keep its policy rate at 2.25% …
4th April 2025
This page has been updated with additional charts and analysis. Inflation steady, but outlook weaker on tariffs Switzerland’s inflation rate was unchanged in March, but that news has been overshadowed by the much higher-than-expected tariffs announced by …
3rd April 2025
Services inflation down sharply March’s big decline in euro-zone services inflation strengthens the case for the ECB to cut interest rates at the meeting on 17 th April. The small fall in euro-zone headline inflation from 2.3% in February to 2.2% in March …
1st April 2025
Likely fall in services inflation points to April cut National inflation figures released so far suggest that euro-zone headline inflation edged down in March. Services inflation probably also fell, which will please ECB officials. The fall in German …
31st March 2025
This publication has been updated with additional analysis Growth still weak, but price pressures remain The EC survey for March shows a deterioration in business and consumer sentiment in the euro-zone, consistent with GDP doing little more than stagnate …
28th March 2025
Norges Bank to cut very cautiously, if at all This morning’s decision by Norges Bank not to follow through with the rate cut that it signalled in January was no surprise. The Bank also revised its interest rate projection up. We forecast two interest rate …
27th March 2025
This publication has been updated with additional analysis. Sentiment improving but activity still weak still weak The Ifo Business Climate Index (BCI) and other surveys for March confirm that the prospect of fiscal stimulus is boosting sentiment in …
25th March 2025
This publication has been updated with additional analysis. Germany recovering but euro-zone still weak February’s Flash Composite PMI provides more evidence that, after expanding by only 0.1% in Q4, the euro-zone economy remains all but stagnant in Q1. …
24th March 2025
Riksbank's next move likely to be a hike The Riksbank left both its policy rate and interest rate forecasts unchanged at today’s meeting, suggesting that monetary policy will be on hold for the foreseeable future. However, we think the Bank is likely to …
20th March 2025
Today’s cut the last of the cycle for SNB We think today’s SNB rate cut, taking the policy rate from 0.5% to 0.25%, will be the last in this cycle. While inflation was very low in February, at just 0.3%, and may fall further in the coming months, …
This page has been updated with additional analysis since first publication. Outlook weak despite prospect of higher defence spending The increase in euro-zone industrial production in January does not change the fact that output remains well below its …
13th March 2025
Period of unanimous support for rate cuts is over The ECB’s decision to cut its deposit rate from 2.75% to 2.50% today came alongside new language which shows that policymakers are becoming less certain about the future path of interest rates. Looser …
6th March 2025
Retail sales drop at the start of 2025 January’s fall in retail sales adds to the impression that the euro-zone economy started 2025 on a weak footing. We expect consumer spending growth to be subdued in the coming quarters. The 0.3% m/m fall in euro-zone …
