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This webpage has been updated with additional analysis. Headline inflation unchanged in May, doubts about future rate cuts Switzerland’s inflation rate remained at 1.4% in May as an increase in rents was offset by a further fall in core goods prices. …
4th June 2024
Russia outperforming, CEE continues to struggle The manufacturing PMIs for May show a divergence in the region, with conditions improving slightly in Czechia and Russia’s economy continuing to boom. But industry weakened sharply in Poland and Turkish …
3rd June 2024
Inflation surprises to the upside, bumpy disinflation lies ahead The stronger-than-expected rise in Turkish inflation to 75.45% y/y in May (consensus 74.8%) is slightly disappointing. It had looked like price pressures were easing in recent months, but …
This page has been updated with additional analysis since first publication. Increase in inflation won’t stop ECB from cutting next week May’s increases in headline and core inflation – and jump in services inflation to a seven-month high – won’t stop the …
31st May 2024
This page has been updated with additional analysis since first publication. Drag on activity from high interest rates continues to fade While April’s money and lending figures suggest the recent rebound in the housing market is cooling and households …
Net lending subdued on the back of rising interest rates Following two consecutive quarters of declines, net lending to property reached £891m in April. The increase was driven by a £731m rise in lending to standing investments, but development lending …
Acceleration in growth, with rebalancing under the surface The strength in Turkey’s economy in Q1 – GDP expanded by a whopping 2.4% q/q – was driven by a large boost from net trade while private consumption growth slowed sharply. This offers signs that …
Persistently high mortgage rates cause prices to stagnate Despite a small increase in the Nationwide house price index in May, the big picture is that the slight rise in mortgage rates since the start of the year has caused house prices to stagnate. The …
Recovery in regional sentiment takes a breather The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in May and our regional-weighted measure edged down slightly. Even so, that still leaves …
30th May 2024
This page has been updated with additional analysis since first publication. EC Survey points to weak economic growth and easing price pressures The EC business and consumer survey for May is consistent with weak growth in euro-zone GDP, while price …
German state data point to smaller-than-expected rise in euro-zone inflation CPI inflation data published by the major German states this morning suggest that both German and euro-zone HICP inflation may come in a bit lower than expected and that though …
29th May 2024
Outlook for retailers remains bright despite soggy start to Q2 The 2.3% m/m fall in retail sales volumes in April was much bigger than our forecast for a 0.5% m/m fall and the consensus forecast for a 0.4% m/m decline as the unusually wet weather …
24th May 2024
Rates to stay on hold throughout the year Turkey’s central bank left its main policy rate unchanged at 50.00% again today and the statement continued to emphasise the need to keep interest rates high for a prolonged period. While the consensus view is for …
23rd May 2024
Survey provides support for summer rate cut Today’s May flash PMI survey will have provided the Bank of England with some comfort after yesterday’s stronger-than-expected inflation data for April. Crucially, the further fall in the services output prices …
Retail sales disappoint Poland’s activity data for April revealed that retail sales growth softened a bit more than expected last month, but that the weakness in industry in March was just a temporary blip. On balance, we remain comfortable with our …
This page has been updated with additional analysis since first publication. Recovery continuing The PMIs for May suggest that the euro-zone economy continued to expand in Q2 while price pressures eased but remained high in the services sector. The ECB is …
This page has been updated with additional analysis since first publication . Limited scope for tax cuts April’s public finances figures got the new 2024/25 fiscal year off to a shaky start and cast further doubt on the Chancellor’s ability to unveil big …
22nd May 2024
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST today. (Register here .) This page has been updated with additional analysis since first publication. Stickiness of services inflation makes …
Easing cycle about to enter a slower phase The decision by the Hungarian central bank (MNB) to cut its base rate by 50bp again today, to 7.25%, will be followed by more cautious monetary easing over the rest of this year. We currently forecast just 100bp …
21st May 2024
This page has been updated with additional analysis since first publication. Construction outlook is poor Euro-zone construction output rose slightly in March but we think the sector will struggle over the coming months. The 0.1% m/m rise in construction …
Economy running hot in Q1, inflation pressures build further The 5.4% y/y rise in Russian GDP in Q1 was a touch stronger than expected and, taken together with the rise in inflation in April, adds further evidence to the view that the war effort is …
17th May 2024
This page has been updated with additional analysis since first publication. Activity rebounds, but net trade remains a large drag The 14.1% q/q annualised rebound in Israeli GDP in Q1 was slightly weaker than expected and left GDP almost 3% below its …
16th May 2024
CEE’s recovery moving into second gear The Q1 GDP figures released out of Central and Eastern Europe (CEE) this morning show that growth strengthened across most of the region at the start of this year, and we expect a further modest pick up over the …
15th May 2024
April’s inflation data confirm Riksbank unlikely to cut in June. The small increase in the Riksbank’s target CPIF measure of inflation, which excludes the effect of changes in interest rates, from 2.2% in March to 2.3% in April, was broadly as expected …
This page has been updated with additional analysis since first publication. Sticky wage growth is a lingering concern for the BoE While the further easing in regular private sector pay growth in March suggests that wage pressures faded a bit faster than …
14th May 2024
Easing cycle delayed, cut pushed back to Q3 Romania’s central bank (NBR) left its policy rate on hold at 7.00% today, in contrast to consensus expectations for a cut but in line with our own forecast. With inflation pressures falling more slowly than …
13th May 2024
This page has been updated with additional analysis since first publication. Strong GDP data probably won’t prevent BoE rate cuts The 0.6% q/q rise in GDP in Q1 confirmed that the recession ended at the start of this year and suggests the economy has been …
10th May 2024
Rates on hold, small chance of a cut in 2024 Poland’s central bank (NBP) left its policy rate on hold as expected at 5.75% today and we don’t expect any change for some time. Still, there is now a growing possibility of an interest rate cut before the end …
9th May 2024
For more detailed and up-to-date analysis see here . Rapid falls in inflation may prompt BoE to cut rates in June The Bank of England left interest rates at 5.25% today as widely expected, but it gave the impression it’s getting closer to cutting rates. …
Riksbank likely to cut faster than it forecasts The Rikbsank’s decision to cut its key policy rate by 25bp today, to 3.75%, was only partly priced in by financial markets but was forecast by the majority of analysts including ourselves. Attention will now …
8th May 2024
This page has been updated with additional analysis since first publication. German industrial recovery halts in March The renewed contraction in industrial production in March after two months of expansion, is a reminder that the German economy is still …
Inflation pressures stabilising, rate cuts still some way off The slightly smaller-than-expected rise in Turkish inflation in April to 69.8% y/y (consensus 70.3%) offers encouraging signs that price pressures have softened again. The 3.2% m/m increase was …
3rd May 2024
This page has been updated with additional analysis since first publication. Industry dragging on the CEE recovery The weak set of manufacturing PMIs out of Central and Eastern Europe (CEE) for April suggest that industrial sectors remained a drag on the …
2nd May 2024
Swiss CPI jumps, but will fall in the coming months The jump in Switzerland’s inflation rate in April was largely due to increases in the volatile food and fuel components. While the data increase our confidence that the SNB will not cut interest rates at …
Higher mortgage rates continue to hit prices The second consecutive decline in the Nationwide house price index in April confirms that the rise in mortgage rates since the start of the year will prevent further near-term price gains. But as we think Bank …
1st May 2024
This page has been updated with additional analysis since first publication. Further evidence the drag on activity from high interest rates is fading March’s money and credit figures provide further evidence that the drag from high interest rates is …
30th April 2024
A strong start to 2024 The national-level data released so far this morning suggest that euro-zone GDP, which will be published in just under an hour, will show an expansion of 0.3% q/q in Q1. All of the euro-zone’s largest economies grew in the first …
Recoveries continue The slightly better-than-expected Q1 GDP figures out of Hungary and Czechia suggest that economic recoveries had a little more momentum at the start of this year than we previously thought and that the risks to our growth forecasts for …
This page has been updated with additional analysis since first publication. Survey points to stagnant economy and still-high price pressures The weaker-than-expected EC business and consumer survey for April is a reminder that the euro-zone economy is …
29th April 2024
This page has been updated with additional analysis since first publication. Fairly strong start to Q2 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in April, but our regional …
Hawkish CBR worried about upside inflation risks The hawkish communications accompanying the decision by the Russian central bank (CBR) to leave its key policy rate on hold today suggests that monetary easing will probably arrive later than we previously …
26th April 2024
Hawkish message as rates remain on hold Turkey’s central bank left its policy rate on hold at 50.00% at today’s meeting, but the statement continued to strike a hawkish tone amid persistent inflation risks in the economy. While we think the tightening …
25th April 2024
This page has been updated with additional analysis since first publication. Signs of life for the German economy The rise in the German Ifo in April, together with the jump in the Composite PMI in the same month, suggests that the German economy may be …
24th April 2024
This page has been updated with additional analysis since first publication. Easing services prices may encourage BoE to cut rates in the coming months Although the unexpected rise in the composite activity PMI in April suggests the economy grew faster at …
23rd April 2024
Weak end to Q1 Poland’s weaker-than-expected activity data for March suggest the risk to our forecast for GDP growth of 2.5% y/y in Q1 (up from 1.0% y/y in Q4) are tilted to the downside. While we maintain our above-consensus GDP growth forecast of 3.0% …
Euro-zone coming out of recession The bigger-than-expected increase in the Composite PMI for April suggests that the euro-zone is coming out of recession, but this will not prevent the ECB from cutting interest rates in June. The increase in the euro-zone …
This page has been updated with additional analysis since first publication. Limited scope for tax cuts March’s public finances figures show that public borrowing in 2023/24 came in £6.6bn higher than the OBR predicted only a month ago, casting further …
This page has been updated with additional analysis since first publication . Retail outlook still bright despite sales stalling in March Although retail sales volumes remaining unchanged in March was worse than expected (consensus forecast +0.3% m/m, CE …
19th April 2024
This page has been updated with additional analysis since first publication. Upside surprise, but big drop to below 2% still coming in April The smaller-than-expected fall in CPI inflation from 3.4% in February to 3.2% in March (BoE and consensus 3.1%, CE …
17th April 2024
This page has been updated with additional analysis since first publication. Weaker labour market points to weaker wage growth The sharp fall in employment and the jump in the unemployment rate in February suggest that wage growth will continue to slow …
16th April 2024
