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This page has been updated with additional analysis since first publication. Economic recovery continues to strengthen The stronger-than-expected 0.4% m/m rise in GDP in May (consensus forecast 0.2%, CE forecast 0.3%) will be welcomed by the new …
11th July 2024
Inflation strengthens, rate hike baked in later this month The rise in Russian inflation to 8.6% y/y in June, alongside weekly figures suggesting that an even larger rise is possible in July, seals the deal on an interest rate hike later this month. We …
10th July 2024
This page has been updated with additional analysis since first publication. Inflation falls further than Norges Bank predicted The continued decline in inflation in Norway supports our view that Norges Bank will start cutting interest rates before the …
This page has been updated with additional analysis since first publication. Rates on hold amid elevated risks Israel’s central bank (BoI) left its policy rate on hold at 4.50% as expected today and interest rates are likely to remain on hold for the time …
8th July 2024
Left-wing coalition becomes biggest group as National Rally underperforms The exit polls for the second-round of France’s legislative election are certainly a surprise. The left-wing New Popular Front (NFP) appears to have become the biggest group in …
7th July 2024
Easing cycle underway, but expect it to be gradual Romania’s central bank (NBR) started its easing cycle at today’s meeting with a 25bp rate cut, to 6.75%. But with inflation and fiscal risks still high, this is likely to be a slow and gradual cycle and …
5th July 2024
This page has been updated with additional analysis since first publication. Retail sector probably past the worst Retail sales ticked up in May and we expect them to continue to rise gradually from here. The 0.1% m/m rise in retail sales in May was …
This page has been updated with additional analysis since first publication. German industry still struggling The slump in German industrial production in May fully reverses the increase in output at the start of the year and suggests that German industry …
House prices slip back in Q2 As the first economic data release under a Labour government since 2010, the decline in Halifax house prices in June meant that Labour’s tenure got off to a slightly downbeat start. However, while we expect house prices to …
The big shift in the political landscape that appears to be delivering a Labour government with a large majority is unlikely to lead to anything like as big a shift in the economic landscape. But at the margin, Labour’s policies generate some upsides to …
4th July 2024
The headline CIPS construction PMI edged back in June from its two-year high last month, but at 52.2 remains in expansionary territory. Both the commercial and housing balances retreated, with the latter falling back below 50, indicating some contraction …
This page has been updated since first publication. Headline inflation edged down slightly, but unlikely to fall much further this year Switzerland’s inflation rate fell to 1.3% in June from 1.4% in May, but concerningly for policymakers, private services …
Activity running hot, inflation rising further The latest activity data suggest that Russia’s economy continued to motor along in May, driven by stronger growth in industry. The economy is clearly overheating and this continues to fuel inflation …
3rd July 2024
No rate cuts for another year or so The decision by Poland’s central bank (NBP) to leave its policy rate at 5.75% today came as no surprise and we doubt that policymakers will have scope to lower interest rates until the middle of next year. The NBP …
Inflation on a (bumpy) path down The larger-than-expected decline in Turkish inflation in June marks the start of a new phase of the disinflation process, and we are likely to see much steeper falls in the y/y inflation rate in July and August. But …
This page has been updated with additional analysis since first publication. Continued strength of services inflation all but rules out July ECB cut It already seemed unlikely that the ECB would cut interest rates at its meeting in July, and June’s …
2nd July 2024
Disinflation resumes, but services inflation stays high Inflation figures for Germany and other major euro-zone economies suggest that, after rising in May, euro-zone headline and core inflation edged back down in June. But services inflation remained …
1st July 2024
This page has been updated with additional analysis since first publication. Further evidence the drag on activity from higher interest rates is fading May’s money and lending data provided a bit further evidence that the drag from higher activity is …
Surveys point to Turkey rebalancing, Russia overheating The manufacturing PMIs for June provide encouraging signs that a rebalancing of Turkey’s economy is underway, with domestic demand weakening and inflation pressures softening. But in Russia, the …
House prices flat in Q2 Although house prices rose slightly in June, an earlier dip means they were flat on the quarter in Q2. With signs mortgage rates are causing demand to falter and that supply is improving, we think that house prices will flatline at …
Final results still uncertain but fiscal outlook will be worse after the election The preliminary results of the first round of voting are broadly in line with the final opinion polls, showing that Emmanuel Macron’s centrist coalition has lost out to both …
30th June 2024
Services inflation remains high Inflation figures for France, Italy and Spain suggest that euro-zone headline inflation edged down in June, while core and services inflation held broadly steady. This supports our view that the ECB will cut rates only …
28th June 2024
This page has been updated with additional analysis since first publication. Stronger economy good news for whoever is Prime Minister next Friday The upward revision to Q1 GDP growth from 0.6% q/q to 0.7% q/q (consensus forecast 0.6% q/q) suggests whoever …
Rates on hold, CBRT sticks to hawkish message The decision by the Turkish central bank (CBRT) to leave its main policy rate on hold again today, at 50.00%, was widely expected, and the continued hawkish communications support our view that interest rate …
27th June 2024
A strong end to Q2 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional growth strengthened at the end of Q2, with our regional-weighted measure of sentiment rising to a two-year high in June. …
This page has been updated with additional analysis since first publication. EC Survey points to economic growth stagnating The EC business and consumer survey for June is consistent with weak growth in euro-zone GDP and suggests that price pressures …
This page has been updated with additional analysis since first publication. Riksbank pauses but will probably cut again in August The Riksbank’s decision to leave rates unchanged was as expected and does not suggest that policymakers are regretting their …
Domestic demand driving the recovery The Polish activity data for May were a mixed bag with retail sales bouncing back, while industry suffered a renewed contraction. With domestic demand likely to stay strong over the coming months, we maintain our …
24th June 2024
This page has been updated with additional analysis since first publication. Business sentiment still poor June’s decline in the Ifo business climate indicator (BCI) to a very low level highlights that even after Germany’s economy grew in Q1, it is far …
This page has been updated with additional analysis since first publication. Sticky price pressures may mean rate cuts are slower and smaller June’s composite PMI suggests the economic recovery lost a bit of momentum towards the end of the second quarter. …
21st June 2024
This page has been updated with additional analysis since first publication. Back to stagflation? The sharp drop in the euro-zone Composite PMI in June suggests a solid recovery in the euro-zone economy is not a done deal, with activity having apparently …
Rebound suggests lower inflation is beginning to support consumption The larger-than-expected increase in retail sales in May more than reversed the rain-driven weakness in April. And with inflation falling back to target, Bank Rate likely to be reduced …
This page has been updated with additional analysis since first publication. Better news doesn’t mask fiscal challenge awaiting next government May’s public finances figures delivered some better news on the fiscal position after the recent run of …
BoE leaves the door open to an August rate cut The Bank of England predictably left interest rates unchanged at 5.25% today but continued to give the impression that the pieces of the puzzle are almost in place for it to cut rates. As a result, we still …
20th June 2024
This page has been updated with additional analysis since first publication. Norges Bank to be one of last DM central banks to start cutting Norges Bank’s verbal guidance and updated interest rate projections reinforce the message that it won’t start …
SNB cuts rates again, but no further cuts likely this year Today’s decision by the SNB to reduce its policy rate from 1.5% to 1.25% was correctly anticipated by two thirds of economists surveyed by Reuters. (We were in the minority anticipating a hold.) …
This page has been updated with additional analysis since first publication. Stubborn services inflation still a point of concern for BoE We’ll be discussing the outlook for Bank of England, ECB and Fed policy in a 20-minute online briefing at 3pm BST on …
19th June 2024
Inflation rises further, another rate hike likely in July The further rise in Russian in inflation to 8.3% y/y in May was stronger than expected, and means that an interest rate hike at the central bank’s next meeting in July now looks all but certain. …
14th June 2024
This page has been updated since publication with additional analysis. Rise in core inflation likely to be temporary The Riksbank’s target measure of inflation, CPIF, remained at 2.3% in May, but the core measure (CPIF excluding energy) rose slightly for …
This page has been updated with additional analysis since first publication. Output fell and outlook for industry is poor The 0.1% m/m decrease in euro-zone industrial production in April was slightly weaker than the published consensus forecast of 0.2% …
13th June 2024
EU protecting domestic producers but not ending Chinese EV imports Reports that the European Commission will “provisionally apply” additional duties of up to 25% on imports of EVs from China from July, on top of the 10% tariff already in place, are in …
12th June 2024
This page has been updated with additional analysis since first publication. Despite stagnating in April, economy will be a tailwind for the next govt The stagnation in GDP in April (consensus 0.0%, CE -0.1%) doesn’t mean the economic recovery has been …
This page has been updated with additional analysis since first publication. S ticky wage growth a lingering concern for the BoE The stickiness of wage growth in April will be a lingering concern for the Bank of England. But with employment falling …
11th June 2024
Macron’s gamble adds to risks for public finances Support for the centrists has held up quite well in European elections but this was overshadowed by the jump in votes for the far-right in France and President Macron’s surprise decision to dissolve …
10th June 2024
CBR sounds hawkish, rate hike becoming more likely Russia’s central bank (CBR) left its key policy rate on hold at 16.00% but delivered a much more hawkish message at today’s meeting. Inflation concerns are likely to persist for some time and we think the …
7th June 2024
Confirmation house prices are stagnant The slight decline in the Halifax house price index in May confirmed that the increase in mortgage rates since the start of the year has caused house prices to stall. Mortgage rates have continued to edge up, so …
This page has been updated with additional analysis since first publication. Euro-zone sales ticked down but past the worst Retail sales ticked down in April we expect them to rise gradually from here. The 0.5% m/m decline in retail sales in April was a …
6th June 2024
Construction activity picks up in both housing and commercial sectors The headline CIPS construction PMI rose to a two-year high of 54.7 in May. Both the commercial and housing balances improved, with the latter rising above 50 for the first time since …
Activity softens slightly, but still running hot Russia’s economy appears to have had a slightly softer start to Q2, with industrial production and retail sales growth both slowing in April. Still, the latest indicators for May have remained strong and …
5th June 2024
Rates on hold until 2025 Poland’s central bank (NBP) left its policy rate on hold at 5.75% today and policymakers are likely to maintain fairly hawkish communications as inflation rebounds in the second half of the year. We don’t expect the easing cycle …
