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February’s data on German industrial production and euro-zone retail sales put a dent in hopes that, after stagnating in Q4 last year, the euro-zone economy will have expanded strongly again in Q1. … German Industrial Production & Euro-zone Retail Sales …
8th April 2010
The news on the euro-zone continues to be dominated by the fiscal crisis in Greece, which has prompted Greek government bond yields and the cost of insuring against default using credit default swaps (CDS) to rise further. These developments are putting …
7th April 2010
The downward revision to Q4’s euro-zone GDP figures is a reminder of the economy’s fragility. Thankfully, March’s final PMI survey brought further evidence that the recovery resumed in Q1. But the coming fiscal squeeze might mean that any improvement will …
Increased domestic spending in Germany would not only assist the euro-zone’s troubled periphery but would also be in Germany’s own interests, helping to reduce unemployment. However, while there are many ways in which the Government could boost domestic …
March’s stronger than expected rise in CPI inflation, combined with the recent depreciation of the euro, may ignite fears that inflationary pressures in the euro-zone are beginning to build. But we continue to think that deflation, rather than a surge in …
5th April 2010
The ECB is unlikely to make any major decisions at its April meeting after taking a big step towards phasing out unconventional policy support in March. While the Bank will argue that measures to support the banking sector are now not needed as much as …
1st April 2010
March’s increase in euro-zone HICP inflation related mainly to energy effects and should be short-lived. Indeed, the further increase in euro-zone unemployment in February was another sign that underlying price pressures are non-existent. … Euro-zone …
31st March 2010
Yesterday’s announcement of a raft of measures aimed to lift the troubled Irish banking sector from its knees, was an important step towards ending the economic slump. But the economy faces other major headwinds too and it will probably remain locked in …
March’s EC business and consumer survey provides some encouragement that, for now, fiscal worries in the region are not weighing too heavily on overall sentiment towards the economy. But the surveys still point to a pretty sluggish recovery. … Euro-zone …
29th March 2010
The latest news on the euro-zone has been mixed. March’s business surveys brought hope that the recovery has not ground completely to a halt and the agreement of a Greek rescue package was a relief. But medium-term prospects have continued to deteriorate, …
Q4’s Irish GDP figures, showing the economy still mired in a deep recession, underline the prolonged and painful adjustments likely to be faced by the euro-zone’s fiscally challenged economies. … Ireland GDP …
25th March 2010
We have revised our forecasts for the euro-zone economy down in response to the escalating fiscal crisis and fading prospects of a consumer recovery. The changes strengthen our view that ECB interest rates are on hold for a prolonged period and that the …
February’s euro-zone money supply figures provided few signs that the ECB’s unlimited provisions of liquidity are prompting much of a pick-up in broad money and bank lending. … Euro-zone Monetary Indicators Monitor …
With the Norwegian economic recovery beginning to look a little more fragile, the Norges Bank has begun to strike a more cautious tone. Although the Bank is likely to raise interest rates again later this year, monetary policy will remain accommodative …
24th March 2010
March’s increases in the euro-zone PMI and German Ifo surveys bring some encouragement that the economic recovery in the region has not ground completely to a halt, but the outlook remains fragile. … Euro-zone Flash PMIs & German Ifo …
Worries about euro-zone fiscal plans have centred mainly on governments’ overly optimistic forecasts for real GDP growth. But weaker inflation could also pose a problem for the region’s public finances, adding to concerns that many governments will …
23rd March 2010
Developments of the past week have brought very little comfort for the euro-zone’s troubled periphery. There has been only limited progress on aid for Greece and the EC has reiterated the need for aggressive fiscal consolidation there and in Spain, …
22nd March 2010
While worries about Greece’s fiscal position have recently eased somewhat, the EC’s latest assessments underline the need for a prolonged bout of fiscal consolidation right across the euro-zone over the coming years. … Euro-zone fiscal squeeze far from …
17th March 2010
March’s fall in German ZEW investor sentiment confirms that confidence in the economic recovery remains fairly fragile. And with euro-zone CPI inflation still very subdued, the ECB is under no pressure to raise interest rates any time soon. … German ZEW …
16th March 2010
Recent more positive developments in Greece have led to some suggestions that the Greek crisis is finally over. But Greece still has a number of major challenges. … Is the Greek crisis really …
15th March 2010
For now, at least, Greece has persuaded the European Commission (EC) that it can meet its ambitious fiscal target for 2010. But the Greek crisis is far from over. Indeed, with the economy set to contract sharply this year, additional fiscal measures may …
12th March 2010
The latest euro-zone industrial production figures provide some hope that the recovery in the wider economy has not ground to a complete halt. … Euro-zone Industrial Production …
The second release relating to Portuguese GDP in Q4 last year revealed a downward revision to the quarterly change in output from the previously estimated zero to -0.2%. So after fairly robust growth in Q2 and Q3 (+0.5% and +0.6% respectively) last year, …
11th March 2010
Q4’s Italian GDP figures were pretty dreadful. With domestic demand still very fragil and a fundamental lack of competitiveness hampering the external sector, Italy looks set to stage a slow and unspectacular recovery in 2010 at best. … Italian GDP (Q4), …
10th March 2010
The latest German industrial production figures provide some hope that the economic recovery has not ground to a complete halt. … German Industrial Production …
8th March 2010
On the whole, last week’s news on the euro-zone economy was once again pretty disappointing. But the recent stabilisation in the unemployment rate is at least a little more encouraging. Unfortunately, this is unlikely to mark the beginning of the end of …
The ECB is withdrawing its unconventional policy support a bit more quickly than had been expected. But its gloomy take on the economic outlook and the prospect of aggressive fiscal tightening in Greece and elsewhere suggest that any tightening of …
4th March 2010
The second euro-zone GDP release for Q4 brings some hope that the slowdown in growth at the end of last year at least partly reflected temporary factors. But the recovery in the region remains fragile. … Euro-zone GDP …
Recent weeks have brought signs that the recovery in the euro-zone might have ground to a halt. Q4’s GDP release confirmed that the region expanded by just 0.1% on the quarter. (See Chart.) And recent business surveys, together with the bad weather, …
3rd March 2010
February’s final PMI survey suggests that the euro-zone economy is still expanding only slowly. And with retail sales falling again in January, the much-needed consumer recovery has yet to materialise. … Euro-zone Retail Sales (Jan.) & Final PMI …
The news that the Greek Government will tomorrow announce further measures to reduce its budget deficit raises hope that it will receive the firmer support from the rest of the euro-zone it requires to meet its short-term financing needs. But the Greek …
2nd March 2010
The Swiss economy is faring better than others in Europe, posting a 0.7% quarterly expansion in Q4. Such a strong pace is unlikely to be sustained, but we have revised up our forecast for GDP growth this year from 1.0% to 1.7%. … Swiss GDP …
January’s increase in euro-zone unemployment shows that households’ real incomes remain under strain despite very low inflation. At least February’s final Purchasing Managers’ Index points to a continued recovery in the manufacturing sector. … Euro-zone …
1st March 2010
Q4’s Swedish GDP figures revealed that the economy remains mired in recession, providing a warning to the Riksbank that monetary policy will need to remain very accommodative for the foreseeable future. … Swedish GDP …
Last week’s disappointing data releases begged the question of whether the euro-zone recovery has ground completely to a halt. The second GDP release confirmed that the German economy stagnated in Q4, while the latest business and consumer surveys for the …
The latest euro-zone, German and Spanish CPI figures highlight the continued lack of inflation pressure in the region. The ECB’s main worry should be the continued threat of deflation, rather than a surge in inflation. … Euro-zone CPI (Final Jan.), Ger. & …
26th February 2010
The ECB will announce the next step in its plan to phase out unconventional policy support this month. This might well be to increase the interest rate on its three-month loans to commercial banks. But its earlier generous provision of long-term loans …
25th February 2010
February’s EC consumer and business survey adds to the recent run of worrying evidence on the euro-zone’s prospects. Our forecast for the economy to expand by 1.5% this year will depend on a renewed pick-up in sentiment pretty soon. … Euro-zone EC Survey …
January’s euro-zone money supply and lending figures added to evidence that domestic demand remained very subdued at the start of this year. … Euro-zone Monetary Indicators Monitor …
The revelation that Greece used complex financial assets to improve the official figures on the public finances earlier this decade highlights the uncertainty surrounding the reliability of these numbers. But with signs that Europe is developing a rescue …
24th February 2010
Recent trade union deals point to a slowdown in German wage growth, which will come as a welcome relief to hard-pressed exporters. This supports our view that a robust export recovery will see Germany outperform the euro-zone average this year. But it …
The second German GDP release confirmed that the recovery ground to a halt in Q4, with exports still rising, but domestic spending very weak. Sadly, the latest fall in consumer confidence suggests that a consumer recovery remains a distant prospect. … …
The latest data add to the recent run of bad news. With German Ifo business sentiment falling in February and French consumer spending dropping in January, there is little hope that the euro-zone recovery will be renewed this quarter. … German Ifo Survey …
23rd February 2010
The latest news from the euro-zone external sector suggests that although exports are expanding strongly, the strong euro is taking its toll on the sector. The recent weakening of the euro is therefore encouraging. But it is unlikely to do much to change …
22nd February 2010
The euro-zone composite PMI was unchanged in February, adding to evidence that the economy probably expanded at a fairly lacklustre pace at the start of this year. … Euro-zone Flash PMIs …
19th February 2010
Q4’s disappointing GDP figures suggested that the Norwegian economy is still in a reasonably fragile state. Accordingly, the Norges Bank risks derailing the recovery if it raises interest rates too aggressively. … Norwegian GDP …
18th February 2010
Despite growing fairly solidly in the last two quarters, Belgium shares some worrying similarities with Greece and the other troubled Southern euro-zone economies. But its stronger trade position and lower levels of household debt should ensure that it …
17th February 2010
December’s healthy rise in euro-zone exports suggests that exporters are continuing to cope with the strong euro. But the cost has been a sharp squeeze in firms’ margins. This casts doubts on whether the recovery can be sustained. … E-Z Trade Balance …
February’s fall in German ZEW investor sentiment is more bad news. But it probably reflects the euro-zone’s fiscal problems more than specific concerns about Germany. We still see the economy leading the region’s recovery. … German ZEW Survey …
16th February 2010
