Filtered by Subscriptions: Europe Economics Use setting Europe Economics
Recently published data show that Spain, Portugal and France made headway in reducing their general government deficits in 2014. But progress among the peripheral countries at the start of 2015 has been rather more mixed, particularly in Greece. … …
2nd April 2015
The euro-zone economic recovery has gained some pace thanks to a pick-up in consumer spending growth. The annual growth rate of retail sales volumes rose to near a ten-year high in January, due partly to falling prices. And a sharp rise in consumer …
1st April 2015
The latest data on euro-zone inflation and unemployment did not lift the threat of a prolonged period of deflation in the currency union. … Euro-zone Flash CPI (Mar.) & Unemployment …
Greece is running out of time to produce a list of reforms that will satisfy its creditors and secure the additional bail-out payment it requires to meet its near-term financial obligations. But even if it is successful, the much more daunting challenge …
31st March 2015
March’s rise in German HICP inflation will add to hopes that recent price declines were a temporary phenomenon that will have positive effects on the economy. But with core inflation still very low even in Germany, there remains a risk of a more damaging …
March’s EC business and consumer sentiment indicators supported the evidence from other surveys that euro-zone economic activity picked up slightly in the first quarter. But growth still looks likely to be too slow to reduce substantially the spare …
Buoyed by falling unemployment, rising equity prices and a boost to their spending power from a lower oil price, euro-zone consumers have become increasingly confident, with the EC’s measure of consumer sentiment rising in March to its highest level since …
27th March 2015
February’s euro-zone monetary data add to the evidence from activity surveys that economic growth in the euro-zone will pick up in the coming months. But troubles in the Greek banking sector remain a major downside risk to the outlook. … Euro-zone …
26th March 2015
March’s rise in the German Ifo index provided further evidence that the recovery in the euro-zone’s largest economy continued in Q1 as firms shrugged off fears over Greece and the weaker euro started to have an effect. … German Ifo Survey …
25th March 2015
While lower inflation and the drop in the euro might boost growth in the euro-zone relative to that in the US, structural constraints, respective policy conditions and the effects of the Greek crisis are likely to limit the extent of any convergence. … …
24th March 2015
March’s further rise in the euro-zone composite PMI adds to the signs that the region’s economic recovery may have picked up a bit of pace in Q1. But growth remains pretty sluggish and France is still performing particularly poorly. … Euro-zone Flash …
A continued economic recovery and the Government’s early repayment of IMF loans have allowed Portugal to distance itself further from beleaguered Greece. But with debt still worryingly high and the recovery unlikely to gain much momentum, market concerns …
23rd March 2015
While there have been few firm developments in the ongoing Greek crisis in recent weeks, the general news on the progress towards plugging the country’s short-term financing hole and finding a lasting solution to its debt burden has supported our view …
20th March 2015
The Norges Bank unexpectedly left its policy rate on hold at 1.25% today but with the economic situation set to deteriorate, we think that the Norges Bank will be forced to cut rates at its next meeting in May. … Norway’s central bank holds rates, but …
19th March 2015
The Swiss National Bank’s decision to leave its deposit rate at -0.75% presumably reflects the slight softening of the franc over recent weeks. But we expect renewed upward pressure on the currency to lead it to cut rates and intervene in foreign exchange …
The vast amount of spare capacity in the Greek economy means that the underlying state of the public finances is rather better than the headline numbers suggest. But it would be wrong to conclude that the closing of Greece’s output gap will solve its debt …
18th March 2015
The Swedish Riksbank unexpectedly loosened monetary policy further today, citing the deflationary risks from the stronger krona , and said it was prepared to do more if needed. With the ECB’s QE likely to push the krona up against the euro even …
January’s euro-zone trade data suggested that the region’s exports are still not benefitting substantially from the weakness of the euro. … Euro-zone Trade & Construction …
Iceland’s central bank left its main interest rates on hold today as it waits to judge the outcome of the ongoing wage negotiations. But with labour market tensions growing and the Sedlabanki raising its 2015 GDP forecasts, we think that the next move in …
The Swedish Riksbank unexpectedly loosened monetary policy further today, citing the deflationary risks from the stronger krona, and said it was prepared to do more if needed. With the ECB’s QE likely to push the krona up against the euro even further, we …
March’s modest rise in the ZEW investor sentiment index suggests that hopes for the German economy have been tempered by worries over the effects of the Greek crisis. … German ZEW (Mar.) & Euro-zone Employment …
17th March 2015
While France has been given an extra two years to meet its new budget targets set by Brussels, we think that it will still struggle to achieve the necessary fiscal consolidation given France’s prevailing political and economic backdrop. … France will …
16th March 2015
The drop in the euro to a 12-year low against the US dollar should clearly provide some support to both activity and inflation in the euro-zone. But it would be wrong to think that its effects are mechanical or that a weaker currency can solve all of the …
13th March 2015
Q4’s modest rise in Irish GDP appeared to confirm that growth is slowing from the very rapid rates experienced earlier this year, perhaps as statistical distortions have faded. Nonetheless, business surveys point to a continued strong recovery ahead. … …
12th March 2015
The combination of Greece’s renewed problems and the onset of deflation is a very toxic one for the euro-zone. At best, it is likely to keep economic growth in the region fairly subdued. At worst, it could fully re-ignite the crisis and blow the currency …
January’s euro-zone industrial production data suggested that industry had a poor start to 2015, with little evidence of a boost from the weaker euro or lower oil prices. … Euro-zone Industrial Production …
Rising expectations for US interest rates and an escalation of the Greek crisis could push the euro down to parity against the US dollar and beyond. But we expect it to stage a partial recovery in 2016. … How low will the euro …
11th March 2015
The latest data on German wage growth suggest that pay is finally beginning to respond to the long labour market recovery. With deflation offering a further boost to real wage growth, we expect the German consumer recovery to gain pace this year. … Is …
Sweden’s headline inflation rate turned positive in February for the first time in eight months. But deflationary pressures have not disappeared altogether and we continue to think that the Riksbank will need to take additional action in April. … …
Sweden’s headline inflation rate turned positive in February for the first time in eight months. But deflationary pressures have not disappeared altogether and we continue to think that the Riksbank will need to take additional action in April. … Swedish …
Concerns that the ECB will struggle to find enough willing sellers of assets to implement its quantitative easing programme may be wide of the mark. But limits set by the Bank itself imply little scope for the programme to be expanded beyond its current …
10th March 2015
Iceland’s economy continued to expand in Q4, suggesting that the country remains well on the road to recovery. … Iceland GDP (Q4) …
January’s French industrial data support the message from the German and Spanish releases that activity was expanding slowly at the start of the year. But the fall in Italian production suggests that the three-year recession there has continued. … French …
Iceland’s economy continued to expand in Q4, suggesting that the country remains well on the road to recovery. … Iceland GDP (Q4 14) …
As the ECB’s quantitative easing programme starts today, it already seems to be having a more positive impact than we had envisaged. But here we explain why we maintain our view that the policy will neither mark the start of a strong recovery nor …
9th March 2015
President Draghi was sounding rather smug last week as he announced the start of the Bank’s quantitative easing programme and forecast that inflation would rise back to target in the medium term. But we doubt very much that the new policy will prompt a …
6th March 2015
The second estimate and breakdown of euro-zone GDP in Q4 confirmed that the region’s recovery remained very weak at the end of last year but provided some tentative signs that it is becoming better balanced. … Euro-zone GDP Breakdown …
January’s industrial production data suggest that Germany and Spain made a reasonable start to 2015, although there are few signs that the drop in the euro exchange rate is prompting a strong recovery. … German & Spanish Industrial Production …
While ECB President Mario Draghi struck a cautiously optimistic tone today, we doubt that the Bank’s quantitative easing programme will prompt a meaningful economic recovery or eradicate the threat of deflation. Meanwhile, his comments on Greece did …
5th March 2015
Although headline consumer price inflation rose from -0.6% to -0.3% in February, this was driven entirely by a rise in energy prices as oil prices reversed some of their recent falls. Core inflation remained steady at a series low of 0.6% and looks set to …
4th March 2015
The latest euro-zone retail sales data and PMIs provided reassurance that the euro-zone economic recovery continued at the start of the year. … Euro-zone Retail Sales (Jan.) & Final PMIs …
After consolidating their fiscal positions in 2014, the peripheral economies had a mixed start to 2015. Ireland and Italy both fared comparatively well but Portugal and Greece struggled. … Euro-zone Fiscal Monitor …
3rd March 2015
The Swiss economy posted another healthy expansion in Q4, with both net exports and domestic demand continuing to rise. But the franc’s surge since then may well see the economy back in recession before long. … Swiss GDP …
The Swiss economy posted another healthy expansion in Q4, with both net exports and domestic demand continuing to rise. But the franc’s surge since then may well see the economy back in recession before long. … Swiss GDP (Q4 …
February’s continued fall in euro-zone consumer prices and the still-high rate of unemployment in January confirm that the ECB faces an uphill battle against the threat of deflation. … Euro-zone Flash CPI (Feb.) & Unemployment …
2nd March 2015
The markets responded with some relief to last week’s provisional approval by the institutions formerly known as the troika of the proposal advanced by the Greek government for a four-month extension of its bailout. But even if an extension is finalised, …
27th February 2015
February’s energy-related increases in inflation in Germany, Spain and Italy did little to reduce the threat of a prolonged bout of deflation in future. Headline rates remain either extremely low or negative and underlying price pressures are very weak. …
The unexpected surge in Swedish GDP in Q4 confirms that the economy is recovering at a solid pace and reduces the chances of a Japanese-style period of stagnation. But with prices continuing to fall, the Riksbank will still need to do more. … Swedish & …
