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Disinflation process entering a slower phase The small fall in Polish inflation to 6.5% y/y in November is likely to mark the start of a slower phase for the disinflation process over the coming months. Against this backdrop, we think the central bank …
30th November 2023
GDP growth slowing, more to come The sharp slowdown in Turkish GDP growth to 0.3% q/q in Q3, together with more timely figures for Q4, suggest that the economy is rebalancing in response to the policy tightening this year. With the central bank set to …
Economy showing further signs of overheating Russia’s economy looks to have started Q4 on fairly solid footing and we think GDP growth of 3.0-3.3% this year is now highly likely. Support from loose fiscal policy and a strong labour market should keep GDP …
29th November 2023
This page has been updated with additional analysis since first publication. CEE recovery continuing in Q4 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally rose in November, and suggest that activity …
This page has been updated with additional analysis since first publication. Euro-zone sentiment remains weak Despite the rise in the EC Economic Sentiment Indicator (ESI) in November, it remained consistent with the economy at best stagnating in Q4. (See …
This page has been updated with additional analysis since first publication. Higher interest rates will continue to percolate through the economy October’s money and credit data suggest that higher interest rates are continuing to percolate through the …
Strong October lending, but anaemic investment volumes While net lending to commercial property increased for the eighth consecutive month in October, this hasn’t translated into higher investment volumes – which fell back again in October. But further …
Trough in mortgage approvals behind us With mortgage rates easing, the rise in mortgage approvals in October confirms that the trough in mortgage approvals is behind us. But with mortgage rates unlikely to fall much below 5% until the second half of 2024, …
This page has been updated with additional analysis since first publication. German economy still very weak The rise in the Ifo Business Climate Index (BCI) in November mirrors the increase in the Composite PMI released yesterday but leaves the index deep …
24th November 2023
CBRT delivers another large hike, end of tightening in sight Turkey’s central bank (CBRT) delivered another 500bp interest rate hike, to 40.0%, at today’s meeting and suggested that it is very close to the end of the tightening cycle. A final 250bp hike …
23rd November 2023
This page has been updated with additional analysis since first publication. Something for everyone, but bigger point is labour supply is too low The net migration figures for the year to June 2023 give some ammunition to both sides of the political …
This page has been updated with additional analysis since first publication. Sticky price pressures will add to the Bank of England’s unease The rise in the flash composite activity PMI, from 48.7 in October to 50.1 in November, is still consistent with a …
This page has been updated with additional analysis since first publication. PMIs consistent with continued recession Despite the rise in the euro-zone Composite PMI in November, it remained consistent with the economy contracting 0.2% in Q4. (See Chart …
Riksbank peaks at 4% The Riksbank’s decision to leave interest rates on hold at 4.0% today was not a major surprise given that financial markets were pricing in only a 10% chance of a hike while economists were evenly split between a hike and a hold. (We …
For more detailed analysis of the Autumn Statement, see our UK Economics Focus here . Chancellor chips away at fiscal tightening ahead of an election The net new giveaway the Chancellor announced today of £14.3bn in 2024/25 (0.5% of GDP) is a bit bigger …
22nd November 2023
This page has been updated with additional analysis since first publication. Consumption bouncing back The batch of Polish activity data for October provide clearer signs that the economy has turned a corner and that a recovery is taking hold, driven by …
Sticking to aggressive easing ... for now The Hungarian central bank (MNB) cut its base rate by another 75bp (to 11.50%) as expected today, and we think it will continue to lower rates in similar steps until the end of Q1. That said, with the disinflation …
21st November 2023
Note: We’ll be discussing the UK macro and market consequences of the Chancellor’s Autumn statement at 10:00 EST/15:00 GMT on 22nd November. Register here for this 20-minute online briefing. This page has been updated with additional analysis since first …
This page has been updated with additional analysis since first publication. Retail woes continued at the start of Q4, and further weakness to come The 0.3% m/m fall in retail sales volumes in October means that after contracting by 1.0% q/q (which was …
17th November 2023
Economy overheating, central bank has more work to do The rise in Russian GDP growth to 5.5% y/y in Q3 was larger than expected and adds to evidence that the economy continued to overheat last quarter. With fiscal policy set to loosen further and …
15th November 2023
This publication has been updated with additional analysis. Output to continue falling Euro-zone industrial production fell in September and is likely to continue contracting in the final quarter of the year, primarily due to weak demand. The 1.1% m/m …
This page has been updated with additional analysis since first publication. Slower progress ahead after big plunge The fall in CPI inflation from 6.7% in September to 4.6% in October was a bit bigger than expected (consensus and BoE forecasts 4.8%, CE …
This page has been updated with additional analysis since first publication. Weak economy will cool labour market from here We do not think the slight acceleration in employment growth in Q3 is a sign of things to come. With business surveys deep in …
14th November 2023
Rise in target measure of inflation supports case for another hike The increase in the Riksbank’s target measure of inflation in October was broadly as anticipated and does not change our view that, while it will be a close call, policymakers are most …
This page has been updated with additional analysis since first publication. Wage growth continues to ease, but only slowly With wage growth continuing to ease and signs that a further loosening in the labour market lies ahead, higher interest rates …
Economy likely to have slowed sharply in Q3 Turkish retail sales and industrial production both fell again in m/m terms in September and GDP growth looks to have slowed sharply in the third quarter as a whole. The impact of policy tightening will take a …
13th November 2023
Climbing inflation will keep pressure on the CBR The further chunky rise in Russian inflation to 6.7% y/y in October provides additional evidence that demand is outstripping supply in Russia’s economy. We think that inflation will continue to rise over …
10th November 2023
This page has been updated with additional analysis since first publication. Jump in inflation not enough to prompt another rate hike Despite the unexpected jump in Norway’s headline and core inflation rates in October, we still think the Norges Bank is …
This page has been updated with additional analysis since first publication. Recession or not, economy not weak enough to quash price pressures The Q3 GDP data will spark a big debate about whether or not a recession has just begun (the published growth …
NBP pauses easing cycle, interest rates to stay high in 2024 The National Bank of Poland (NBP) surprised most analysts in pausing its easing cycle today, and we think that the scope to deliver further interest rate cuts over the coming year is quite …
8th November 2023
NBR yet to show signs of a dovish pivot The National Bank of Romania (NBR) left its policy rate on hold again at 7.00% today, and offered little evidence to suggest it is considering the start of an easing cycle just yet. We currently expect an easing …
This page has been updated with additional analysis since first publication. Sales fall further and more weakness ahead Euro-zone retail sales fell in September and, in our view, will remain weak in the coming months as the economy falls into recession. …
This page has been updated with additional analysis since first publication. Housing suffers but commercial surprisingly resilient The uptick in the headline CIPS construction PMI from 45.0 in September to 45.6 in October still left it below the 50 …
6th November 2023
This page has been updated with additional analysis since first publication. PMIs underline weak outlook, easing price pressures Final PMIs released today confirmed the preliminary estimates and are consistent with our forecast that euro-zone GDP will …
Inflation eased a touch, peak approaching soon Turkish inflation unexpectedly fell to 61.4% y/y in October and while we think inflation is likely to rise again in the coming months, the peak is probably not too far away. The central bank’s aggressive …
3rd November 2023
Bank doubles-down on rates staying high for long The Bank’s decision to leave interest rates at 5.25% for the second time in a row and the doubling down on the message that rates cuts are a long way away supports our view that Bank Rate will stay at 5.25% …
2nd November 2023
This page has been updated with additional analysis Inflation unchanged and set to stay low Swiss headline inflation remained unchanged in October at 1.7% and although the core rate rose for the first time in eight months we expect inflation to stay below …
Retail sales continue to boom as industry comes off the boil Russian retail sales continued to expand at a strong clip in September, but industrial production growth was less impressive. Higher interest rates and inflation will weigh on activity in the …
1st November 2023
This page has been updated with additional analysis since first publication. Another mixed bag of PMIs The manufacturing PMIs across Emerging Europe for October suggest that industrial activity in Russia remained resilient last month, while industrial …
House prices confound expectations The large increase in house prices in October was a massive surprise given higher mortgage rates should be severely restricting the number of people able to buy and the amount they can spend. But at present, stretched …
This page has been updated with additional analysis since first publication. Inflation falling as economy flat-lines The euro-zone economy contracted in Q3 and the continued weakness of the surveys at the start of Q4 suggests that the outlook is poor. …
31st October 2023
Sharp fall in inflation, another interest rate cut incoming The drop in Polish inflation to 6.5% y/y in October was larger than expected and should pave the way for another 25bp interest rate cut by the central bank next week (to 5.50%). The decline from …
Czech economy flirting with recession again The 0.3% q/q decline in Czech GDP in Q3 was worse than expected, and suggests that the economy will probably contract over the year as a whole. This weakness in the economy also increases the likelihood that the …
Narrowly avoiding recession The slowdown in French GDP growth from an upwardly-revised +0.6% q/q in Q2 to only 0.1% in Q3 (see Chart 1) was a little better than the consensus and our own forecast (+0.1% and -0.2% q/q) and means GDP was 1.8% larger than …
This page has been updated with additional analysis since first publication. Sentiment ticks up, recovery slowing taking shape The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were another mixed bag in October, …
30th October 2023
This page has been updated with additional analysis since first publication. Economy struggling, labour market coming off the boil, price pressures easing October’s business and consumer survey from the European Commission added to the evidence that the …
Approvals bottom out, but will remain low The drop in mortgage approvals in September left them a third below their usual level in the years leading up to the pandemic as high mortgage rates put homeowners off moving and priced many first-time buyers out …
Note: We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm GMT on Thursday 2 nd November . (Register here .) This page has been updated with additional analysis since first publication. Drag on lending and …
This page has been updated with additional analysis since first publication. Pause in the recession Preliminary data released this morning show that the Swedish economy flatlined in Q3 (0.0% q/q) after contracting sharply in the second quarter (-0.8%). …
CBR delivers a larger hike as fiscal risks mount Russia’s central bank (CBR) opted for a larger-than-expected 200bp interest rate hike, to 15.00%, at today’s meeting and, while policymakers seemed to signal that the tightening cycle is at an end, we think …
27th October 2023
