Filtered by Region: Europe Use setting Europe
Overview – While the more uncertain global backdrop due to the new US tariffs regime means we have become more confident in our below-consensus UK GDP forecast, the prospect of falling mortgage rates suggests UK housing demand is well insulated from US …
1st May 2025
Overview – We’ve become more concerned about the outlook for the economy due to the drags from higher businesses taxes and the more uncertain global backdrop being bigger than we thought and the boost from government spending being smaller. Our forecasts …
31st March 2025
Overview – We’ve raised our GDP growth forecasts across most of the region for this year and think that Central and Eastern European (CEE) economies will pick up pace going into 2026, despite the headwind from US tariffs. An end to the war in Ukraine …
27th March 2025
Table of Key Forecasts Global Overview – We expect the world economy to grow a touch slower in the next couple of years than it did in 2024. Trump’s policies will drag on US growth, policy support will not prevent a slowdown in China’s economy, and looser …
Overview – Following upward revisions to our forecasts for policy rates and bond yields, we have raised our forecasts for prime property yields in Europe and now expect increases of around 20-25bps by the end of 2026. Meanwhile, despite a slightly …
Table of Key Forecasts Overview – EM GDP growth picked up towards the end of last year, but the outlook is increasingly challenging – and not just because of US import tariffs. Weaker capital inflows, lower commodity prices and tight policy will all drag …
26th March 2025
Overview – While tariffs and geopolitics complicate the near-term outlook for many commodities, the backdrop generally remains one of weak fundamentals; our end-2026 price forecasts for energy and industrial metals are well below consensus. Gold is a …
24th March 2025
Overview – The euro-zone will get a boost from Germany’s decision to ditch its fiscal rules and ramp up defence spending, as well as the relaxation of the EU’s budget rules. But governments other than Germany won’t loosen policy very much, and the …
21st March 2025
This third edition of our annual Climate Economics Outlook updates our long-term emissions forecasting framework to incorporate our latest macroeconomic and energy views. Note: You can create your own emissions scenarios with our interactive Emissions …
6th March 2025
Overview – The economic outlook has worsened over the past couple of months, which supports our call that the recovery in commercial property will be modest by past standards. Admittedly, interest rates are set to fall back. But with the spread over gilts …
19th February 2025
Overview – Our forecast that mortgage rates will fall further than widely expected suggests that a decent recovery in transactions will allow house prices to rise by around 3.5% this year and by 4.5% next year, which would be a bit more than the …
4th February 2025
Tab le of Key Forecasts Overview – Headwinds to growth will remain strong in 2025 and our forecasts lie below the consensus. While more protectionist US trade policy will hit China and Mexico, the impact for most is likely to be limited. Currencies will …
19th December 2024
Table of Key Forecasts Global Overview – We expect 2025 to be another year of reasonably healthy global GDP growth and a continued normalisation of monetary policy. To the extent that tariffs hurt the global economy, the damage will be less than …
Overview – Slowing growth across Emerging Europe in recent quarters has set a downbeat tone heading into 2025. With domestic and external headwinds remaining strong, we think that most economies in the region will disappoint consensus expectations for …
17th December 2024
Overview – We expect economic growth in the euro-zone to remain sluggish. This is partly due to adverse demographics and structural forces hampering the competitiveness of industry. But past monetary tightening will continue to weigh on investment and …
16th December 2024
Overview – Most energy and industrial metals prices will fall in 2025 as structural headwinds to demand build and supply rises. Geopolitical developments remain a key uncertainty and it is easy to think of developments in the Middle East that could push …
13th December 2024
To see how our latest European property forecasts stack up against the other regions we cover and against other asset classes, please see our new Global Returns Dashboard here . Overview – The recovery in property values is underway. But we think it will …
12th December 2024
This publication has been updated to reflect changes to our forecasts after the October GDP release on 13th December 2024. Overview – Despite the deterioration in the outlook for the UK's key trading partners, we remain optimistic that UK GDP growth will …
10th December 2024
Overview – The fiscal loosening announced in October’s Budget means inflation and gilt yields are now set to be higher than previously expected over the next few years. And with the spread of gilt yields over property yields currently narrow, that implies …
22nd November 2024
Overview – A fall in mortgage rates from 4.5% now to around 3.6% in late 2025 may mean that, despite increases in taxes in the Budget on 30 th October, house prices rise by 5.0% in 2025 rather than the consensus forecast of 2.5-3.0%. By allowing the …
22nd October 2024
Overview – We are not expecting the planned fiscal policies of the government to derail the economy – we expect GDP to grow by 1.0% this year and by a decent 1.5% in both 2025 and 2026. Instead, the main influence of the government’s plans to raise public …
1st October 2024
Table of Key Forecasts Global Overview – The global economy has hit a soft patch with the euro-zone virtually stagnant, the US labour market flagging and China rationing its policy stimulus. We expect this weakness to persist around the turn of the year …
26th September 2024
After two disappointing years, recent data suggest Europe’s commercial real estate market is stabilising. But will recovery follow and how strong will it be? Join our 20-minute online session on Wednesday 25th September at 10:00 BST as we discuss the …
23rd September 2024
Note: This Outlook was originally published on 17th September . It was updated on 1st October to reflect a revision to our ECB interest rate view . Overview – The euro-zone appears to have lost some momentum and is likely to remain sluggish in the coming …
18th September 2024
Overview – We have generally revised down our growth forecasts for this year and next. Weakness in the euro-zone will remain a drag on export sectors across Central and Eastern Europe (CEE) in the coming quarters, while tight policy will take some heat …
17th September 2024
Overview – Commercial property yields and capital values have stabilised in recent months, which has encouraged investors to dip their toes back into the sector. But the recovery is set to be a weak one. Admittedly, we expect rental growth will be a …
22nd August 2024
We still think that a fading in services inflation and below-target CPI inflation will prompt the Bank of England to cut interest rates from 5.25% now to 3.00% by the end of 2025, rather than to 4.00% as investors anticipate. That explains why we think …
31st July 2024
Overview – House prices will probably remain flat for the rest of 2024, but lower mortgage rates will provide scope for prices to beat expectations next year. Indeed, our forecast that Bank Rate will be lowered by more than investors anticipate suggests …
22nd July 2024
Table of Key Forecasts Global Overview – The global economy seems to be heading into recovery mode as the adverse effects of the previous surge in inflation subside. Real incomes are recovering in most advanced economies and China is feeling the benefits …
27th June 2024
Overview – The next government, which the polls ahead of the election on 4 th July suggest will be a Labour one, will benefit from a combination of lower inflation, lower interest rates and faster economic growth than most are expecting. We think that a …
25th June 2024
Overview – The euro-zone has come out of a long period of stagnation and will expand at a moderate pace over the coming two years. The recovery will be faster in some southern economies, such as Spain, than in core economies, notably Germany, while the …
20th June 2024
NB. Our new and improved interactive Europe Commercial Property dashboard, home to key macro and commercial real estate forecasts, can be found here . Overview – The price correction showed signs of stabilisation in early 2024, but we think further, …
13th June 2024
Overview – Activity strengthened across Emerging Europe in Q1 and we expect this to be sustained over the coming quarters, with GDP growth in most economies exceeding consensus expectations in 2024. This is likely to be accompanied by renewed inflation …
6th June 2024
Overview – Capital values for most property sectors are now close to bottoming out, but with yields set for a period of stability the recovery will be modest by past standards. We expect all-property total returns to average 7.5% p.a. over 2024-28. That’s …
30th May 2024
Overview – Economies in Central and Eastern Europe (CEE) ended last year in stagnation, but headwinds to growth are lifting and we think that 2024 will be a year of modest recovery. Inflation has fallen sharply in recent months but in some parts of the …
26th March 2024
Note: We will be discussing the outlook for European commercial real estate markets in a 20-minute online briefing at 10am BST on Wednesday 10th of April. (Register here .) Overview – Further near-term yield rises will push property values lower in the …
21st March 2024
Overview – The euro-zone will remain close to recession until the second half of this year and the subsequent recovery is likely to be weak. Household real incomes will pick up only slowly and consumers will be cautious amid a softening labour market. …
15th March 2024
Overview – A slight rise in mortgage rates since the start of the year is likely to mean house prices stall in the near term. But our forecast that Bank Rate will be cut faster than most expect, to 3.00% by the end of 2025, suggests that further …
Note: We’ll be discussing the UK commercial property outlook at a Drop-In on Wednesday, 28th February. Register here Property Drop-In: UK commercial property’s muted recovery | Capital Economics for the 20-minute online briefing. Overview – With property …
23rd February 2024
Our forecast that CPI inflation will fall below 1.0% later this year suggests that Bank Rate will be cut from 5.25% now to 3.00% rather than the low of 3.50-3.75% priced into the market, 10-year gilt yields will decline from 3.90% now to around 3.25% by …
30th January 2024
Overview – The euro-zone will remain in or close to recession in the first half of 2024 as the effects of higher interest rates continue to weigh on household consumption and investment, and fiscal policy is tightened. Headline inflation has already …
12th December 2023
We think the rally in developed market (DM) government bonds will continue for a while yet, as some major central banks, including the Fed, ultimately cut by more than investors seem to expect. But we anticipate that yields will generally settle at much …
11th December 2023
Overview – A weak economic outlook underpins our view that prime rent growth will continue to slow in Europe next year. At the same time, valuations remain stretched and the pace of recent yield rises suggests it is too early to call the bottom in prices. …
8th December 2023
Overview – Inflation and interest rates will fall across Central and Eastern Europe (CEE) in 2024 and an economic recovery is likely to take hold across the region. But the task of bringing inflation back to central banks’ targets will take time and we …
7th December 2023
Overview – With higher interest rates taking longer to percolate through the economy, we now think the recession will be shallower and GDP growth will stay weak throughout all of 2024. It’s a softer landing for the economy, but the runway is longer. And …
5th December 2023
Overview – Property yields rose further in Q3, but with risk-free rates now falling back, we think they will peak by the end of 2023. That will help stabilize capital values, but, given historically narrow yield spreads, we doubt we will see much yield …
24th November 2023
Overview – Surprisingly resilient demand, high inflation, and limited supply mean a severe drop in house prices will be avoided. With the peak in mortgage rates now behind us and the labour market in good shape, there is no clear trigger for another …
21st November 2023
Overview – With economic activity weakening, we expect rental growth to continue trending downwards over the next year. At the same time, valuations remain stretched despite property yields continuing to rise at a steady pace. As a result, we have …
4th October 2023
Click here to read the full report. Overview – Russia and Turkey have outperformed the rest of the region this year amid support from loose policy, but both economies look set for a slowdown in 2024 while recoveries take shape across Central and Eastern …
28th September 2023
Overview – We expect the euro-zone economy to struggle over the next 18 months, and a mild recession in the coming quarters looks more likely than not. Lower energy prices and improved global supply chain conditions should keep headline inflation on a …
27th September 2023
