Filtered by Region: Europe Use setting Europe
No respite for German industry The 1.1% m/m fall in industrial production in September was worse than the consensus and our own expectation. Business surveys suggest that shortages of components, particularly in the auto sector, will keep manufacturing …
5th November 2021
Shortages continue to threaten recovery The latest RICS survey indicated that construction activity remained robust in Q3, while the outlook for the near term is favourable. Although we agree, we expect that building material and labour shortages, along …
4th November 2021
A modest improvement, but supply issues continue to bite Construction firms reported that activity strengthened in October despite higher costs and continued difficulty sourcing materials. The big picture is that until those constraints ease construction …
Supply problems, price pressures weigh on activity The PMIs suggest the euro-zone’s economic recovery will slow markedly in Q4 as supply shortages intensified throughout the region, especially for manufacturers. They also show that price pressures are …
Inflation jump to prompt further 75bp hike The further rise in Russian inflation to 8.1% y/y last month paves the way for the central bank to hike the one-week repo rate by another 75bp (to 8.25%) when it meets in December. The outturn was up from 7.4% …
3rd November 2021
Labour market recovery is likely to continue While the fall in euro-zone unemployment in September brings the jobless rate back to its pre-pandemic level, employment has not fully recovered. But the economy is growing strongly and the vast majority of …
House prices maintain their momentum Yet another upside surprise in house prices last month confirmed that the end of the stamp duty holiday in September did little to cool the market. We expect house prices to continue to beat expectations in the near …
Swiss inflation close to its peak at 1.2% Inflation did surprise on the upside in Switzerland in October, but only by a trivial amount, leaving the headline rate at just over 1%. The market is pricing in an increase in policy rates to zero by end-2023 but …
2nd November 2021
Supply constraints take a greater toll on industry The manufacturing PMIs in October showed that supply disruptions took a greater toll at the start of Q4, with industrial production growth in Turkey slowing and Czech industry likely to have contracted …
1st November 2021
A strong end to Q3, but virus outbreak dampens outlook Russia’s economy enjoyed a strong end to Q3, but the country’s severe COVID-19 outbreak has clouded the outlook more recently and is likely to cause growth to soften in Q4. Russia’s industrial sector …
29th October 2021
Growth will slow sharply after nearly full recovery The solid increase in euro-zone GDP in the third quarter means that the recovery phase is now almost complete in most of the euro-zone. Growth will be much slower in Q4 because the boost from reopening …
Further signs of stagnating spending growth The tepid rise in consumer credit lends support to our view that economic growth slowed to little more than a crawl in September. Against the backdrop of rising COVID-19 cases and higher inflation, we expect …
Risks to inflation next year lie firmly to the upside Euro-zone inflation looks set to rise further before year-end as higher input costs continue to feed through. We agree with the ECB that the forces pushing inflation up should fade next year, and our …
Rising repayments weigh on net lending Net lending to UK commercial property was negative for the fourth month in a row in September, probably due to a rise in repayments. We expect further repayments, caution when seeking development opportunities and …
Housing market shrugs off the end of the stamp duty holiday Unsurprisingly, mortgage lending spiked in September as buyers rushed to complete before the stamp duty taper period ended. More notable is the resilience of mortgage approvals, suggesting that …
Further rise in Polish inflation to prompt another rate hike The rise in Poland’s headline inflation rate to 6.8% y/y in October opens the door for the central bank to deliver a 25bp at next week’s MPC meeting. Elsewhere, Czechia’s economy performed a …
A strong start to Q4 While many economies in Europe are facing the twin headwinds of supply constraints and high gas prices, the KOF Economic Barometer in October suggests that the Swiss economy continued to grow strongly at the start of Q4. The slight …
Almost fully recovered The stronger-than-expected increase in French GDP in Q3 took the economy back to within a whisker of its pre-virus size as the full lifting of restrictions caused activity to rebound strongly. Supply chain disruptions and rising …
Supply chain problems still evident The EC Economic Sentiment Indicator for October increased a touch, but the details show that expectations for production declined slightly, probably due to the worsening supply chain problems. So there is nothing here …
28th October 2021
Sentiment softens at the start of Q4 The EC’s Economic Sentiment Indicators for October showed that sentiment in industry and services softened across most of Central and Eastern Europe at the start of Q4. With rising virus cases adding to existing …
Strong Q3 but supply chain pressures building The stronger-than-expected growth in Swedish GDP in Q3 shows that the recovery continued apace over the summer, lifting activity even further above its pre-pandemic level. But while business confidence …
Economy likely to tread water in Q4 The fourth successive monthly fall in the Ifo Business Climate Index provides more evidence – if it were needed – that supply side disruption is causing the German economy to slow sharply and suggests that the problems …
25th October 2021
Building price pressures raises chances of near-term interest rate hike The fifth consecutive fall in retail sales in September, together with signs that non-retail spending was also weak, supports our view that the economic recovery slowed to a crawl …
22nd October 2021
Supply problems getting worse October’s euro-zone PMI surveys suggest that supply problems in the manufacturing sector are getting worse, weighing on output and causing price pressures to intensify. The fall in the Composite PMI from 56.2 in September to …
Inflation will rise further before it comes back down Euro-zone inflation looks set to climb further in the coming months as higher input and energy costs feed through. An unusually cold winter would put even more upward pressure on gas prices in the …
20th October 2021
The lull before the storm The dip in CPI inflation in September feels a bit like the lull before the storm as we expect inflation to jump to close to 4.0% in October and to between 4.5% and 5.0% by April next year. As such, the fall in September probably …
Inflation close to reaching a peak The further rise in Israeli inflation to 2.5% y/y in September contained no major surprises and we think it will ease towards the lower end of the central bank’s 1-3% target next year. Even so, with the recovery motoring …
15th October 2021
Improving credit conditions may protect housing market from higher rates An ongoing improvement in credit availability may offset the increase in Bank Rate we expect in 2022. That offers support to our forecast that mortgage rates will remain low. A …
14th October 2021
Core inflation to stay moderate While CPIF inflation in Sweden rose to a 155-month (!) high in September, we expect core inflation to remain at a more moderate level over the coming years, and lower than in the US, say. As a result, we forecast the …
Supply shortages biting The large decline in euro-zone industrial production in August was largely due to supply shortages affecting production, particularly in the German auto sector. While demand is still strong, prolonged supply shortages and high …
13th October 2021
Shortages may now be biting harder The 0.4% m/m rise in GDP in August confirms that the rapid gains in output, which in just 16 months lifted GDP from being 25.1% below its February 2020 pre-pandemic peak to 0.8% below, are now behind us. And shortages, …
Economy bounces back from weak start to Q3 Turkey’s industrial sector bounced back in August following a weak start to the quarter and, while retail sales growth slowed, it looks like the economy recorded another robust increase in GDP in Q3. Industrial …
12th October 2021
Tight market may tip MPC towards earlier rate hike The further strengthening of the labour market in August may prompt some members of the Monetary Policy Committee (MPC) to put more weight on the upside risks to inflation rather than the downside risks …
Weak core inflation will not prevent December rate hike There was nothing in today’s release of Norwegian inflation data for September to overly trouble the Norges Bank, or cause it to deviate from its stated intention to raise interest rates again in …
11th October 2021
Growing fears of a “bottleneck recession” The whopping 4.7% m/m fall in German manufacturing production in August left industrial output 9.0% below its February 2020 level. With conditions having worsened since then, Germany’s manufacturing problems …
7th October 2021
Inflation hits a new high, tightening cycle may continue for longer Russian inflation accelerated to a fresh five-year high of 7.4% y/y in September and, while this was mainly driven by a sharp increase in food inflation, the central bank is likely to …
6th October 2021
Retail sales levelling off, but consumption strong in Q3 August’s euro-zone retail sales data suggest that consumer spending on goods is flatlining. But overall consumption is still likely to have grown fairly strongly in Q3 as spending on services …
Recovery in construction falters due to shortages The further drop in the construction PMI in September suggested that the recovery in construction has faltered amid a severe lack of materials and staff, spiralling costs, and softening demand. The drop in …
Recovery continues, but loses momentum The PMIs are consistent with the euro-zone’s economic recovery losing some momentum as GDP approaches its pre-pandemic size and as supply shortages take their toll, especially in manufacturing. The surveys also show …
5th October 2021
Switzerland didn’t get the “inflation surprise” memo Inflation is a rare beast in Switzerland at the best of times and the lower-than-expected September print means that we now doubt it will even breach 1% this year. Against this backdrop, the stage is …
4th October 2021
Inflation rises, but further rate cuts still on the cards Turkey’s headline inflation rate rose further to 19.6% y/y in September and core inflation partially reversed its recent decline, but political pressure means that the central bank is likely to cut …
Industry coming off the boil, but consumer demand remains strong Russia’s hard activity data for August showed that industry has continued to struggle while loose fiscal policy has supported consumer spending. We think that consumer demand should hold up …
1st October 2021
Inflation heading to 4% Euro-zone inflation looks set to continue on its upward trend and we think it will soon hit 4%. That makes it more likely that the ECB will scale back its asset purchases substantially in March. But we still expect headline and …
Industrial activity so far holding up in face of global constraints The set of manufacturing PMIs from Switzerland and the Nordics for September suggest that industrial activity has so far been pretty resilient in the face of global supply-chain …
Decline in the unemployment rate likely to continue The fall in euro-zone unemployment in August brings the jobless rate back very close to its pre-pandemic level. But employment is still below pre-virus levels, highlighting that the labour market …
30th September 2021
Less spare capacity raises risk of rate hike in the coming months Today’s release suggests the economy is closer to its pre-pandemic level than we had previously thought and raises the risk that the Bank of England hikes interest rates sooner than our …
Price growth cools, but only gradually The only small gain in house prices in September suggests that house price growth slowed as the stamp duty holiday was withdrawn. But with inventory limited and demand resilient, we suspect that house price growth …
Sentiment holds up in the euro-zone The small improvement in economic sentiment in the euro-zone in September provides reassurance that supply shortages and the Delta variant will not cause a sharp slowdown in economic growth. Nevertheless, price …
29th September 2021
Broad based decrease in net lending Net lending to property decreased for the third consecutive month in August, driven by falls in both lending for standing investment and development. Looking ahead, we think that tight credit conditions and the slow …
Increase in mortgage size another sign of resilient demand While still above pre-COVID-19 levels mortgage approvals edged down in August, suggesting no great rush to move before the stamp duty holiday taper ends at the end of September. But an increase in …
