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ECB policy rates at a plateau Today’s decision to leave interest rates unchanged, and the tone of the press release, were as expected. There is no mention of ending PEPP reinvestments early or raising banks’ reserve requirements, but in the press …
26th October 2023
CBRT maintaining the fight against inflation Turkey’s central bank stuck to the course today as it delivered another 500bp interest rate hike, to 35%. A few more large hikes are likely to be delivered in the coming months too, which should help to turn …
This page has been updated with additional analysis since first publication. German economy still contracting The small rise in the Ifo Business Climate Index (BCI) in October still left the index in contractionary territory, echoing the downbeat message …
25th October 2023
This page has been updated with additional analysis since first publication. Signs that recession may be underway, but services price inflation still sticky The composite activity PMI inched up from 48.5 in September to 48.6 in October after five months …
24th October 2023
This page has been updated with additional analysis since first publication. PMIs consistent with recession and falling inflation The further decline in the euro-zone Composite PMI in October left it well into contractionary territory and the breakdown …
This page has been updated with additional analysis since first publication. Faint signs the labour market hasn’t loosened as much The labour market appeared not to loosen as much as we thought in August based on the Office for National Statistics’ (ONS) …
This page has been updated with additional analysis since first publication. Economy slowly coming back to life Poland’s stronger-than-expected activity data for September suggest that the economy started on its road to recovery in Q3. With inflation and …
20th October 2023
This page has been updated with additional analysis since first publication. The start of another retail recession The 0.9% m/m fall in retail sales volumes in September meant sales volumes fell 0.8% q/q in Q3 and suggests that after the 18-month-long …
This page has been updated with additional analysis since first publication. Buoyant economy to date increases scope for pre-election giveaways September's public finances figures continued the recent run of better-than-expected news on the fiscal …
This page has been updated with additional analysis since first publication. Fall in inflation in September will not change ECB's tune The breakdown of euro-zone HICP inflation data for September, published today, reveals that there was a significant fall …
18th October 2023
The failure of CPI inflation to fall in September from August’s rate of 6.7% will be a bit of a disappointment to most (consensus forecast 6.6%, CE forecast 6.8%). But at 6.7% it is still below the 6.9% rate the Bank of England projected back in August …
This page has been updated with additional analysis since first publication. Wage growth passed its peak, but it will fall only gradually Cooling labour market conditions appeared to start feeding through into an easing in wage growth in August. That …
17th October 2023
Fall in inflation but Riksbank still not done This page has been updated with additional analysis since first publication. The drop in inflation in September was a little smaller than we and the consensus had anticipated and strengthens the case for the …
13th October 2023
This page has been updated with additional analysis since first publication. August’s resilience won’t prevent contraction in GDP in Q3 The 0.2% m/m rise in real GDP in August followed July’s 0.6% m/m contraction and will raise hopes that the economy has …
12th October 2023
Inflation now starting to take off The larger-than-expected rise in Russian inflation to 6.0% y/y in September will concern policymakers at the central bank and suggests that price pressures are now well and truly building in the economy. We think the …
11th October 2023
First clear signs of slowdown emerge The m/m falls in Turkish retail sales and industrial production in August provided the first clear signs that economic activity has started to soften following the policy U-turn earlier this year. Policy tightening …
Fall in inflation increases chances of November rate cut The larger-than-expected fall in Czech inflation in September, to 6.9% y/y, increases the chance of policymakers kickstarting a monetary easing cycle at their next meeting in November. We remain …
10th October 2023
Lower inflation suggests that Norges Bank is done As a result of September’s weaker-than-expected inflation data from Norway, we now think that Norges Bank’s tightening cycle is over . The decline in CPI inflation from 4.8% in August to 3.3% in September …
This page has been updated with additional analysis since first publication. Weakness in German industry to continue The further drop in German industrial production in August was better than it looked as it was driven by volatile components. However, it …
9th October 2023
Near-term momentum in house prices is downwards The sixth consecutive monthly decline in the Halifax House Price Index in September leaves it significantly more downbeat than the Nationwide figures about near-term momentum in house prices. Given the …
6th October 2023
NBR holding firm in inflation fight The National Bank of Romania (NBR) kept its main policy rate unchanged at 7.00% today, and we expect policy to remain on hold into next year. The NBR will be the last in Central and Eastern Europe to start cutting …
5th October 2023
NBP cuts again, but rates won’t fall as far as most expect The National Bank of Poland’s (NBP’s) decision to cut interest rates again today, from 6.00% to 5.75%, suggests that the doves are ruling the roost on the MPC, but we think that interest rates …
4th October 2023
This page has been updated with additional analysis since first publication. Euro-zone headed for recession The drop in retail sales in August and weakness in the final PMIs for September are consistent with our view that the euro-zone economy will fall …
This publication has been updated with additional analysis. Inflation rising, but not for long The rise in Switzerland’s headline inflation rate in September was largely due to the increase in oil prices in recent months, which caused energy inflation to …
3rd October 2023
This page has been updated with additional analysis since first publication. PMIs increase, but CEE industry still in the doldrums The manufacturing PMIs increased across most of Emerging Europe last month, but remained consistent with weak industrial …
2nd October 2023
Pause in price falls unlikely to mark the trough The stabilisation of house prices in September was a surprise given mortgage rates are still well above the level which allowed the first leg down in house prices to bottom out. But leading indicators of …
This page has been updated with additional analysis since first publication. Monetary policy to stay tight despite big fall in inflation September’s sharp drop in euro-zone inflation was largely due to base effects, but core inflation also came in below …
29th September 2023
Approvals to remain weak for the next six months The further decline in mortgage approvals in August to their lowest level since the aftermath of last autumn's “mini” budget showed that high mortgage rates are keeping home purchase demand very weak. Our …
This page has been updated with additional analysis since first publication. Higher interest rates weighing more heavily on lending The drag from higher interest rates on bank lending grew further in August, particularly in the housing market. Although …
Softer inflation print raises the chance of another rate cut The sharper-than-expected decline in Polish inflation to 8.2% y/y in September raises the chance of another interest rate cut by the central bank at its meeting next week but, at this point, we …
This page has been updated with additional analysis since first publication. GDP growth nudged up, but resilience won't last The final Q2 2023 GDP data release shows that the economy was a bit more resilient in the first half of this year than we …
This page has been updated with additional analysis since first publication. Sentiment ticks down, but still consistent with recovery The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in …
28th September 2023
This page has been updated with additional analysis since first publication . Euro-zone sentiment weakens further The weak outturn for the euro-zone’s EC Economic Sentiment Indicator (ESI) in September supports our view that the economy will contract in …
German state figures point to big drop in euro-zone inflation The big drop in CPI inflation across German states in September all but confirms that German and euro-zone HICP inflation also fell sharply this month. While this mainly reflects base effects …
Fairly solid growth, meaningful slowdown unlikely until 2024 Russia’s industrial production and retail sales data for August suggest that activity remained fairly solid and we think the economy is on track for GDP growth of 2.5% this year. Monetary policy …
27th September 2023
This page has been updated with additional analysis since first publication. Easing cycle just around the corner The Czech National bank (CNB) left interest rates on hold again at 7.00% at today’s meeting, but we still think that an easing cycle will …
Entering the second phase of the easing cycle The Hungarian central bank’s (MNB’s) decision to cut the top of its interest rate corridor, by 250bp, today is a first step in what is likely to be a shift in the monetary policy framework that will be …
26th September 2023
Ifo points to renewed contraction in German GDP in Q3 The Ifo Business Climate Index (BCI) confirmed that the German economy remained in the doldrums in September. We continue to expect contractions in GDP in both Q3 and Q4 of this year. The small fall in …
25th September 2023
This page has been updated with additional analysis since first publication. Signs that recession has started all-but confirms interest rates have peaked The fall in the activity PMI further below the boom-bust level of 50.0 in September suggests the …
22nd September 2023
This page has been updated with additional analysis since first publication. Composite PMI edges up but still points to recession The small increase in the euro-zone Composite PMI in September left it still in contractionary territory. We think a further …
This page has been updated with additional analysis since first publication. Not as good as it looks, sales likely to fall in Q3 The 0.4% m/m rebound in retail sales volumes in August isn’t as good as it looks as it partly reflected a pickup in sales …
CBRT sticks to the course with 500bp hike Turkey’s central bank delivered a 500bp interest rate hike at today’s meeting, to 30.00%, providing further encouragement about policymakers’ commitment to tackling the inflation problem. A lot more tightening …
21st September 2023
The Bank’s job is done The surprise decision by the Bank of England to leave interest rates unchanged at 5.25% today probably means that rates are already at their peak. We think rates will stay at this peak of 5.25% for longer than the Fed, the ECB and …
Early signs of a recovery Poland’s retail sales and industrial production figures for August suggest that the economy may be at the early stages of a recovery, but we still expect overall GDP growth to be relatively tepid in the near term. We think that …
Norges Bank and Riksbank nearly done with rate hikes Following today’s rate hikes, the Riksbank and Norges Bank are now at, or close to, the end of their tightening cycles. Both central banks’ new projections suggest that they are more likely than not to …
SNB goes for a hawkish pause, but we think rates have peaked. The SNB’s decision to keep rates unchanged at 1.75% was a big surprise, although it left the door open for further hikes. We do not expect any further increases in the policy rate as we expect …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing September’s Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm BST today. Register here to join. A bit more wiggle room for pre-election …
This page has been updated with additional analysis since first publication. Easing in services inflation may mean BoE halts rate hikes…after tomorrow Note: We’ll be discussing September’s Fed, ECB and Bank of England policy decisions in a Drop-In on …
20th September 2023
CBR delivers another large hike, more tightening still in the pipeline Russia’s central bank (CBR) raised its policy rate by 100bp, to 13.00%, at today’s meeting and with the ruble likely to remain under pressure and inflation pressures to keep building, …
15th September 2023
End of the tightening cycle The ECB’s decision to raise interest rates by a further 25bp today probably brings the current tightening cycle to an end. But given the strength of underlying inflation, we expect rates to remain at this level for at least a …
14th September 2023
