Filtered by Region: Europe Use setting Europe
Recession over, but recovery likely to be weak The 0.1% q/q expansion in Czech GDP in Q2 took the economy out of technical recession last quarter, but we expect the recovery over the coming quarters to be weak. With inflation likely to continue falling …
31st July 2023
This page has been updated with additional analysis since first publication. Business surveys point to stagnation The small fall in the EC Economic Sentiment Indicator (ESI) in July leaves it consistent on past form with output stagnating and suggests …
28th July 2023
Sentiment improves, but is still depressed The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally ticked up in July, but our regional measure still points to weak GDP growth at the start of Q3. Economic …
Germany still the weak link National data released so far suggest that the euro-zone economy held up better than we had anticipated in Q2, with Germany still the laggard among major economies. We continue to think that monetary tightening will take an …
Strong economic growth in France and Spain The big increases in Q2 GDP in Spain and particularly France suggest that the euro-zone has so far coped with policy tightening much better than feared. However, the France data were flattered by temporary …
ECB hikes and leaves options open As was universally expected, the ECB raised interest rates by a further 25bp today and indicated that further hikes are possible but not certain. At the press conference we expect the main message to be that policy will …
27th July 2023
This page has been updated with additional analysis since first publication. MNB may pause or slow its easing cycle after September Hungary’s central bank (MNB) announced another 100bp cut to its one-day quick deposit rate (the key policy rate at the …
25th July 2023
This page has been updated with additional analysis since first publication. Germany still in recession at start of Q3 The bigger-than-expected fall in the German Ifo, together with the drop in the PMIs published yesterday, suggest that the German economy …
This page has been updated with additional analysis since first publication. Note: Join our special online briefing after the Fed and ECB’s July decisions, and previewing the BoE’s August meeting, at 10:00 EDT/15:00 BST on Thursday 27 th July . Register …
24th July 2023
Another election likely after inconclusive poll The People’s Party (PP) won the most seats at yesterday’s general election but, even together with the far-right VOX, they achieved only 169 seats which leaves them seven short of a majority. And given that …
This page has been updated with additional analysis since first publication. Economy still in recession July’s euro-zone PMIs are consistent with our non-consensus view that the currency union’s economy will remain in recession. But they also suggest …
Inflation worries trigger bumper hike The much larger-than-expected 100bp interest rate hike (to 8.50%) by the Russian central bank underscores policymakers’ concerns about inflation risks. And while we don’t think monetary tightening will continue quite …
21st July 2023
This page has been updated with additional analysis since first publication. Resilience in June, but Q2 was still weak June’s retail sales and industrial production data out of Poland suggest that the economy held up relatively well last month, but we …
This page has been updated with additional analysis since first publication. Unexpected borrowing undershoot as receipts rise sharply Note: Join our special online briefing after the Fed and ECB’s July decisions, and previewing the BoE’s August meeting, …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing the UK inflation, growth and policy outlook in 20-minute online briefing at 9am BST today. Register here . Some good news, but we’re still raising our …
19th July 2023
Inflation falling, but still too high for the Riksbank The fall in CPIF inflation, the Riksbank’s target variable, in June was smaller than policymakers expected, which will encourage them to raise the policy rate from 3.75% to 4.00% at the next meeting …
14th July 2023
This page has been updated with additional analysis since first publication. Uptick in May but weakness ahead Euro-zone industrial production edged up in May but it probably still declined over Q2 as a whole and we think further weakness is ahead. The …
13th July 2023
This page has been updated with additional analysis since first publication. Note: We’ll be discussing the UK inflation, growth and policy outlooks after the June CPI release on Wednesday 19th July. Register here to join that 20-minute online briefing. …
11th July 2023
This page has been updated with additional analysis since first publication. Core inflation again stronger than expected In June, Norway’s inflation data were much stronger than expected for the second month running. While the Norges Bank has signalled a …
10th July 2023
A fragile plateau The decline in the Halifax house price index in June was surprisingly modest given the scale of the increase in mortgage rates in the same month. But the current level of house prices looks unsustainably high given where mortgage rates …
7th July 2023
Renewed fall in May and outlook is bleak German industrial production fell in May and is likely to have declined in Q2. We think industry will continue to struggle over the rest of this year. The 0.2% m/m fall in industrial production in May was worse …
Retail sales flat in May Euro-zone retail sales remained very weak in May and point to household consumption having fallen in Q2. Further out, low consumer confidence and rising interest rates suggest that household consumption will fall further over the …
6th July 2023
Economy weakened at the end of Q2 The downward revision to the euro-zone Composite PMI for June, from 50.3 to 49.9, left it consistent with the economy stagnating at best at the end of Q2. Given that the PMI overstated growth in Q1, and that other data …
5th July 2023
This page has been updated with additional analysis since first publication . Inflation below 2% won’t stop the SNB hiking The fall in inflation in June was smaller than the SNB had expected and SNB Chairman Thomas Jordan’s comments after the meeting two …
3rd July 2023
This page has been updated with additional analysis since first publication. Euro-zone HICP (June) Strength of core inflation means ECB will keep hiking June’s inflation data won’t shift the dial at the ECB. While the headline rate is on a steep downward …
30th June 2023
National index resilient, but regional data confirm affordability matters The pause in the fall in house prices extended into June according to Nationwide, but we think it is just a matter of time before the spike in mortgage rates in recent weeks causes …
This page has been updated with additional analysis since first publication. Recession still to come this year as resilience fades The final Q1 2023 GDP data confirms that the economy steered clear of a recession at the start of 2023. But with around 60% …
June inflation figures will keep ECB hawkish The increase in German headline and core inflation in June was mainly due to base effects. Euro-zone headline inflation probably still fell but the core rate is likely to have been little changed which will be …
29th June 2023
ESIs point to weak growth, further disinflation The European Commission’s Economic Sentiment Indicators (ESIs) for Central and Eastern Europe (CEE) generally fell in June, and our regional-weighted headline measure points to lacklustre GDP growth this …
Sentiment weakens and points to stagnation The EC Economic Sentiment Indicator (ESI) weakened further in June and is broadly consistent with the economy stagnating at best. We expect the euro-zone’s mild recession to continue for the rest of the year as …
This page has been updated with additional analysis since first publication. Higher interest rates continue to take a toll on bank lending Higher interest rates continued to weigh on bank lending in May, particularly in the housing market. This effect …
The Calm Before the Storm The tick up in mortgage approvals in May sustained the partial recovery from the slump at the beginning of the year. (See Chart 1.) But the increase reflects earlier declines in mortgage rates and will be cut short by their more …
Riksbank likely to hike more than it expects The 25bp rate hike announced by the Riksbank today, which brings the key policy rate to 3.75%, had been strongly signalled at the Riksbank’s last meeting. But the accompanying statement and decisions to …
Inflation back under 2% The further fall in Spanish HICP inflation will provide some respite for households who have suffered a sharp hit to real household income over the last year. But it will have little sway over ECB decision-making as …
This page has been updated with additional analysis since first publication . Economic momentum continued in Q2 The industrial production and retail sales data for Russia for May continue a run of strong data showing that activity has recovered this year. …
28th June 2023
Improvement in core inflation not enough to appease ECB The drop in Italy’s headline and core inflation in June is encouraging. But the euro-zone core rate is unlikely to have declined significantly due to base effects related to the anniversary of the …
This page has been updated with additional analysis since first publication. More bad news on the German economy The slump in the German Ifo, together with the drop in the PMIs, released on Friday, suggests that German GDP probably contracted for the …
26th June 2023
This page has been updated with additional analysis since first publication. Services price inflation still sticky June’s flash activity PMIs won’t do much to ease the Bank of England’s inflation fears, which suggests that yesterday’s interest rate rise …
23rd June 2023
The fall in the euro-zone flash Composite PMI from 52.8 in May to 50.3 in June left it even lower than our below-consensus forecast. On the face of it, the index still points to a small expansion in Q2, but it hasn’t been a good leading indicator …
This page has been updated with additional analysis since first publication. Sales boosted by hot weather, but drag from soaring mortgage rates yet to bite The further rebound in retail sales volumes in May suggests the recent resilience in economic …
50bps and at least another 25bps hike to come The Bank of England’s decision to raise rates by 50bps, from 4.50% to a near 15-year high of 5.00%, is unlikely to be the last hike given the UK’s higher and longer lasting inflation problem. We think the …
22nd June 2023
This page has been updated with additional analysis since first publication . Economy continues to struggle May’s industrial production and retail sales data out of Poland were weaker than expected and are consistent with our forecast that GDP growth …
Norges Bank steps up the pace of rate hikes, more to come Today’s 50bp rate hike by the Norges Bank, taking its policy rate to 3.75%, won’t be the end of its tightening cycle. We already expected the policy rate to hit 4%, above the consensus forecast, …
SNB hikes by 25bp and signals more to come The 25bp rate hike announced by the SNB this morning was in line with market expectations but less than the 50bp we had predicted. However, the accompanying statement and upward revision to inflation forecasts …
This page has been updated with additional analysis since the post-meeting statement and press conference. Hawkish CNB will turn dovish by year-end The Czech National Bank (CNB) left its main policy rate on hold again today, at 7.00%, and the hawkish …
21st June 2023
Ugly inflation print tips balance to 50bp hike tomorrow In response to May’s inflation data , released earlier today, we now expect the MPC to raise interest rates by 50bps to 5.00% at tomorrow’s meeting. A lot of attention has focussed on the fact that …
This page has been updated with additional analysis since first publication. Public finances limits the Chancellor’s room for manoeuvre Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST. …
This page has been updated with additional analysis since first publication. MNB leading the EM cutting cycle Hungary’s central bank (MNB) announced a cut to its one-day quick deposit rate (the key policy rate at the moment) by 100bp, to 16.00%, today. We …
20th June 2023
