Filtered by Region: Europe Use setting Europe
Sentiment falls again as recovery comes off the boil The continued fall in the EC’s Economic Sentiment Indicators for September provides further evidence that the regional recovery in Central and Eastern Europe has slowed in Q3 as supply disruptions have …
29th September 2021
Risk that the economy will take a small step back The tepid increase in consumer credit in August provides more evidence that the economy didn’t regain much momentum after stagnating in July. And with the current fuel crisis restraining activity (outside …
A disappointing end to Q3 The third successive decline in the Ifo Business Climate Index in September provides further evidence that Germany’s recovery is losing steam, as supply chain difficulties persist and the surge in gas prices piles additional …
24th September 2021
Weaker activity and rising inflation may make life tricky for the MPC The small fall in the composite activity PMI in September indicates that the economy lost a little more momentum. But at the same time, there were clear signs that price pressures have …
23rd September 2021
Supply shortages hamper growth, exacerbate price pressures September’s PMIs suggest that the pace of recovery slowed further at the end of Q3, in part as the euro-zone economy approaches its pre-virus size but also as supply shortages continue to bite. …
Recovery losing steam Poland’s economy appeared to lose steam in August amid signs that global chip shortages started to weigh on industrial output and retail sales failed to reverse a dip in July. We still think that GDP will rise by a robust 1.5% q/q …
21st September 2021
Borrowing undershoot won’t stop the Chancellor unwinding the fiscal boost August’s public finances figures provided further evidence that the government’s financial position isn’t as bad as the Office for Budget Responsibility (OBR) predicted back in …
Upside risks to inflation are building Rising costs – from shipping to energy – are likely to push euro-zone inflation up even further in the coming months. They might also mean that it doesn’t fall quite as quickly next year as we currently assume. But …
17th September 2021
Retailers struggle as households spend elsewhere The fourth consecutive fall in retail sales in August isn’t as bad as it looks as some of it reflects households spending more on non-retail items as life returns closer to normal. But as non-retail …
Wage pressures not quite as weak as Q2 data suggest The sharp fall in euro-zone average hourly labour costs in Q2 compared to a year earlier was mainly due to pandemic-related distortions to the data that will continue to muddy the picture for another …
15th September 2021
Climb in inflation towards 4.5% to be an uncomfortable ride for the MPC The leap in CPI inflation from 2.0% in July to a nine-year high of 3.2% in August (consensus 2.9%, CE 3.1%) is the first step in a rise that may take inflation to 4.5% or above by …
Signs that re-opening inflation is fading The rise in Israeli inflation to an 8-year high of 2.2% y/y in August was partly driven by a chunky rise in housing costs, but there are signs that “re-opening inflation” in services has run its course. We think …
14th September 2021
Surge in home moving pushes lending up to post-financial crisis high The further surge in mortgage lending to a fresh post-financial-crisis high and booming house prices begs the question whether there is over-exuberance in the housing market. But as the …
Stronger inflation to change the conversation at the Riksbank The stronger-than-expected pick-up in Swedish headline inflation in August ups the ante for the Riksbank ahead of next week’s policy meeting. While repo rate hikes are low down on policymakers’ …
Labour market still tightening despite unwinding of the furlough scheme The latest data brought more signs that labour market slack is declining fast and that labour shortages are contributing to faster underlying pay growth. We suspect that beyond the …
Weak start for Turkey’s economy in Q3 Turkey’s industrial production and retail sales figures for July suggest that, after putting in a better-than-expected performance in Q2, the economy made a soft start to Q3. Industrial production contracted by 4.2% …
13th September 2021
Weak core inflation will not prevent tightening cycle start The fact that the Norges Bank’s target measure of inflation fell for the fifth month in a row in August, and is likely to remain steady at about half the Bank’s target rate over the next six …
10th September 2021
Virus cases and shortages stall the recovery The rise in COVID-19 cases and the product/labour shortages are probably behind the stalling in the UK’s economic recovery in July. With next week’s CPI release set to reveal a jump in inflation from 2.0% to …
Inflation hits fresh five-year high, tightening cycle not over Russian inflation rose to a fresh five-year high of 6.7% y/y in August and, while there are some tentative signs that price pressures have started to soften recently, we think the central …
8th September 2021
Economy and labour market recovering strongly With revised data showing that the euro-zone economy performed even better than previously thought in Q2, the ECB is sure to revise up its GDP forecasts on Thursday. That said, even if it reduces the pace of …
7th September 2021
Auto sector still stuck in low gear The small increase in German industrial production in July merely reversed the fall in June, and left output well below normal. While the rest of the economy is now close to a full recovery, supply chain problems among …
Materials shortages restrain activity The further easing in the construction PMI in August was due to materials shortages rather than any softening in demand. The drop in the headline construction PMI from 58.7 in July to 55.2 in August suggested that, …
6th September 2021
Consensus could be surprised on the downside beyond 2022 The upgrades to the IPF Consensus views for this year still leaves them below our forecast. However, our more downbeat view on the outlook for offices because of the shift to more remote working …
3rd September 2021
Household spending patterns returning to normal The recovery in euro-zone retail sales ended in July as sales fell sharply compared to June. However this does not affect our view that consumption will grow strongly in Q3, not least because we think the …
Inflation jump to delay start of easing cycle The stronger-than-expected Turkish inflation reading of 19.3% y/y in August doesn’t rule out the start of an easing cycle later this year. However, we now only see scope for an interest rate cut at the final …
Post-pandemic recovery phase nearly over Data released this morning show that Swiss GDP is on track to re-gain its pre-pandemic level in Q3 and that inflation is creeping higher. Nonetheless, the near-term outlook is not as rosy as it was. Inflation is …
2nd September 2021
Economy starting Q3 on decent footing Russia’s activity data for July show that industrial production has come off the boil, but retail sales continued to expand strongly, and the strength of consumer demand will probably keep the central bank in …
1st September 2021
Further decline in measured joblessness The fall in euro-zone unemployment in July appears to be down to a decline in the overall labour force rather than an increase in employment, highlighting that the labour market recovery still has a long way to go. …
Manufacturing conditions normalise as supply disruptions ease The PMIs for August suggest that manufacturing conditions have softened in Q3 as output and new orders fell further from their recent highs. More than anything, it looks like conditions are …
Economy shrugs off lockdown and expands in Q2 A strong rebound from May’s three-week lockdown meant that Turkey’s economy managed to expand by 0.9% q/q over Q2 as a whole and the early signs are that it carried this momentum into Q3. Robust growth and …
Second consecutive fall in net lending as banks tighten on repayments The fall in July’s net lending total was the fastest drop since last July. As investment activity remained healthy and the economic recovery remains solid, it is likely that lenders …
31st August 2021
Inflation will rise further before dropping back After rising to a near-10-year high of 3.0% in August, we suspect that euro-zone inflation will rise even further in the coming months. But this is due to temporary forces that should fade next year, …
Households’ appetite for credit subdued The latest money and credit figures do little to ease mounting concerns that the resurgence in virus cases in July and so-called “pingdemic” brought the consumer recovery to a halt. Consumers did not borrow …
Approvals decline as tax break winds down Mortgage approvals continued to fall back in July as the stamp duty holiday was tapered, but they remained above pre-COVID-19 levels. Timely indicators suggest that demand will be resilient even when the tax break …
Swedish GDP (officially!) above pre-virus level and growth to pick up in Q3 The release of GDP data from Sweden this morning confirmed that the economy surpassed its pre-virus peak in Q2, and we expect output to make further gains in Q3. The 0.9% q/q …
27th August 2021
Losing some momentum The second successive decline in the Ifo Business Climate Index in August provides further evidence that Germany’s recovery is losing some momentum, partly due to supply chain difficulties in the manufacturing sector and the Delta …
25th August 2021
Recovery slowing more quickly than we had thought The chunky fall in the composite activity PMI suggests that the economy struggled to gain fresh momentum in August despite the apparent easing of the “pingdemic” and the final relaxation of all domestic …
23rd August 2021
Retail sales drop, but industry continues to thrive Polish industrial production continued to expand at a solid pace in July while retail sales fell as the re-opening of the economy shifted spending away from goods. The big picture is that the economy …
20th August 2021
Norwegian economy re-gained pre-virus peak in June The release of Q2 GDP data from Norway this morning confirmed that the mainland economy came within a whisker of re-gaining its pre-virus level in June. Growth is set to accelerate in Q3. The 1.4% q/q …
Core inflation to jump in August The final euro-zone inflation data for July show that global supply problems have not pushed up goods prices dramatically, and “re-opening inflation” has been limited so far. We think that base effects will cause core …
18th August 2021
Still on course to reach 4.5%, despite July’s fall July’s drop in CPI inflation is likely to be followed by sharp rises in the next few months, taking inflation to a peak of about 4.5% by the end of the year. But provided the spike in inflation does not …
Recovery will continue at healthy pace over the summer The strong growth in the euro-zone GDP in Q2 is likely to be repeated in Q3 despite the spread of the Delta variant, and should bring the economy back towards its pre-virus size in the coming months. …
17th August 2021
Re-opening boost pushes CEE economies above pre-pandemic levels The Q2 GDP data for Central and Eastern Europe revealed that the regional recovery gathered pace last quarter as economies reopened following virus waves in Q1. We expect the recovery to …
Surge in earnings growth, but underlying pay pressures contained The latest batch of data brought signs that labour shortages are feeding through into higher pay growth in certain sectors. But underlying pay pressures were reasonably contained overall, …
Re-opening boost pushes economy far above pre-pandemic level The larger-than-expected 15.4% annualised expansion in Israeli GDP in Q2 took the economy to more than 3% above its pre-pandemic level. While we expect growth to slow markedly in Q3 as the …
16th August 2021
Strong GDP growth takes economy back to pre-pandemic level The larger-than-expected 10.3% y/y expansion in Russian GDP in Q2 suggests that the economy returned to its pre-pandemic level as growth was driven by broad-based strength across sectors. Growth …
13th August 2021
Small rise in inflation will leave the Riksbank unfazed The slight pick-up in Swedish headline inflation in July was primarily driven by a rise in energy inflation. However, the fall in core inflation to its lowest level since 2014, means that the …
Strong GDP growth to give the NBP food for thought The 1.9% q/q expansion in Poland’s GDP in Q2 left the economy 0.5% above its pre-pandemic size and we expect another strong reading for Q3 as activity in consumer-facing sectors continues to recover. …
Manufacturing unlikely to boost GDP in coming quarters The second successive monthly fall in euro-zone industrial production in June was largely due to ongoing supply-chain difficulties in Germany. As these will ease only slowly, we don’t expect industry …
12th August 2021
Recovery regains some momentum The media headlines have focused on the big 4.8% q/q gain in GDP in Q2, following Q1’s 1.6% q/q fall. But the real news was the unexpectedly strong growth in June which suggested that the recovery maintained a bit more …
