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Economy bounces back quickly from lockdown Turkey’s industrial production and retail sales figures for June confirm that the economy bounced back quickly from May’s three-week lockdown. This, coming alongside the further jump in inflation in July, means …
12th August 2021
Below-target core inflation will not prevent September rate hike The small increase in headline CPI inflation in Norway, and the bigger decrease in the Norges Bank’s target measure, will have no bearing on the near-term outlook for monetary policy given …
10th August 2021
Strong core inflation to trigger further rate hikes Although Russian headline inflation came in at a slightly-weaker-than expected 6.5% y/y, that masked a worryingly strong rise in core inflation that’s likely to trigger further monetary tightening. We …
6th August 2021
Recovery in July, but further slowdown still expected Halifax house prices returned to growth on a monthly last month, partly reversing a weak June figure. But the underlying trend, as the stamp duty discount is phased out, is for a modest slowdown. …
Manufacturing hobbling the wider recovery The further decline in German industrial output in June, to 6.8% below its pre-pandemic level, underlines that the problems in the auto sector will hold back an otherwise strong economic recovery. It is now …
Recovery gathers pace, but may prove short-lived The latest RICS survey confirmed that construction activity rose strongly in Q2 and suggests expectations are upbeat about the outlook. But while we think output is likely to remain strong in the coming …
5th August 2021
Construction PMI dips, but underlying demand strong July’s construction PMI figure was slightly disappointing compared with the previous month’s highs. But it continued to point to robust activity and we think any dip is most likely a reflection of …
Rebound still in full swing The final PMIs show that the euro-zone’s recovery continued apace at the start of Q3. Price pressures are continuing to mount and point to an increase in inflation in the coming months, but we expect this to be temporary. …
4th August 2021
Inflation jumps again, but CBRT unlikely to respond with rate hike The further jump in Turkey’s headline inflation rate to 19.0% y/y in July is unlikely to trigger an interest rate hike but it will delay the start of an easing cycle until the back end of …
3rd August 2021
Supply disruption weighing on output in Czechia and Poland The PMIs for July suggest that supply chain disruptions weighed on output in Czechia and Poland and continued to put upward pressure on prices. Meanwhile, the releases suggest that manufacturing …
2nd August 2021
Re-opening inflation peak appears to have passed While inflation in Switzerland is likely to rise further in the coming months, the anticipated bout of re-opening inflation may have already passed, and the SNB will not be fazed. The slight pick-up in …
Southern rebound lifts euro-zone GDP After increasing more than expected in Q2, thanks to strong growth in the southern economies, euro-zone GDP should expand rapidly again in Q3 as core economies close in on their pandemic levels. The 2.0% q/q increase …
30th July 2021
Inflation to rise above 3% but will fall back next year Euro-zone inflation resumed its upward trend in July and we expect it to rise further in the remainder of the year. But this is largely due to temporary factors, which should fade in 2022. The …
Weaker-than-expected rebound as economy re-opens The disappointing 0.6% q/q expansion of Czech GDP in Q2 suggests that industry may have fared worse than expected as input shortages took a greater toll on output. With virus restrictions easing further …
Take-off in German inflation to be temporary The increase in German inflation to nearly 4% on the CPI measure was partly due to last year’s VAT cut and partly due to rising energy and food inflation, all of which should prove short-lived. Inflation is …
29th July 2021
Office and retail pessimism eases, while industrial sentiment still buoyant Surveyors indicated that both occupier demand and investment enquiries improved in Q2 on the back of stronger industrial activity. Looking ahead, expectations for office and …
Resurgence of virus triggers some rise in consumer caution The money and credit data showed that consumers were willing to take on more debt in June. However, with consumers accumulating excess savings at a faster pace, there were signs that the …
Sentiment drops back, price pressures building The EC’s Economic Sentiment Indicators showed a surprising fall in regional sentiment in July, but we suspect that this was a blip rather than the start of a trend. We still expect growth to be strong in Q3, …
Recovery still going strong Economic sentiment in the euro-zone continued to improve in July as restrictions were lifted further. The EC Survey also showed that persistent input shortages are causing price pressures to grow across all sectors. That said, …
Rush for stamp duty relief drives borrowing to record high A surge in borrowing ahead of the tapering of the stamp duty holiday in July saw new mortgage lending set a fresh record high. Meanwhile, robust mortgage approvals pointed to activity remaining …
Swedish GDP growth set to accelerate further in Q3 The 0.9% q/q increase in Swedish GDP in Q2 was a touch weaker than our forecast (+1.0%) but stronger than the consensus (+0.7%). While the best of the rebound in the industrial sector may be behind us, …
Russia’s recovery continues at a solid pace in Q2 Russian activity data for June showed that the economy expanded at a solid pace in Q2, with overall GDP probably returning to just shy of its pre-pandemic level. While the re-opening boost will fade in Q3, …
28th July 2021
House prices lose a little momentum The drop back in the Nationwide house price inflation in July suggests that the tapering of the stamp duty holiday has taken a little heat out of the market. But as the tax break was just one of many factors that have …
Economy still on track for strong recovery The small decline in the Ifo Business Climate Index in July suggests that the rebound in Germany may be losing some momentum. But Germany will still post very rapid GDP growth in both Q2 and Q3 and should regain …
26th July 2021
Recovery becoming more tepid The second consecutive decline in the flash composite PMI in July came as no surprise to us as we expected the pace of the economic recovery to naturally slow after the big gains following the reopening of retail and …
23rd July 2021
Rising activity, rising inflation July’s euro-zone PMIs confirm that the economy is still rebounding rapidly and that price pressures are continuing to build. While the Delta variant poses a risk to our above-consensus GDP forecasts, it seems most likely …
Some signs of softening The underlying trend in retail sales volumes is a bit weaker than the 0.5% m/m rise in June suggests. And other evidence indicates that the resurgence in the virus and the “pingdemic” may have taken some oomph out of the overall …
Still few signs of widespread pressures building The rise in headline inflation in Israel to a near 8-year high of 1.7% y/y in June was largely a result of base effects that pushed up food inflation. The muted 0.1% m/m rise in prices suggests that …
15th July 2021
Semiconductor shortages to weigh on auto production for some time The euro-zone’s industrial sector took a step backwards in May as the global semiconductor shortage hit auto production. Supply disruptions look set to drag on for a while yet, constraining …
14th July 2021
Decline in inflation will reassure Riksbank The further fall in Swedish headline inflation in June is at odds with the recent data from the US and the UK, but came as no surprise given the recent drop in electricity prices. And with non-energy inflation …
Subdued core inflation will not prevent September rate hike The small increase in headline CPI inflation and small decrease in the Norges Bank’s target measure of inflation will make no difference to the immediate outlook for monetary policy, not least …
9th July 2021
Market set to remain tight as stamp duty holiday ends Activity and house prices were extremely strong again in June according to the RICS survey, although there was a distinct softening in the more forward-looking balances. As supply remains limited, we …
8th July 2021
Inflation rise will spook CBR The further rise in Russian inflation to a stronger-than-expected 6.5% y/y in June means the central bank (CBR) is likely to up the pace of tightening when it meets in a couple of weeks. A 75bp hike (to 6.25%) seems most …
7th July 2021
Auto sector dragging on the recovery The small decline in German industrial production in May, which left it well below its pre-pandemic level, was due to another big fall in vehicle production. The problems in that, admittedly important, sector are …
Retail sales back above pre-pandemic level Euro-zone retail sales rose back above their pre-pandemic level in May. And as Covid restrictions continue to be lifted, spending in the services sector is recovering very rapidly, which will provide a …
6th July 2021
Strong recovery accompanied by growing price pressures The PMIs point to the euro-zone economy recovering strongly in June and provide evidence that price pressures are now spilling over into the services sector, even in the periphery. Nevertheless, we …
5th July 2021
Inflation picks up, start of easing cycle likely to be delayed The fresh rise in Turkey’s headline inflation rate to 17.5% y/y in June, coupled with signs of a strong rebound in activity after May’s three-week lockdown, means that an interest rate cut in …
Re-opening boosts hiring activity The big fall in euro-zone unemployment in May highlights that the re-opening of many services sector firms in that month has boosted hiring activity. And with a strong recovery now underway, it now looks unlikely that …
1st July 2021
Price pressures continue to mount The PMIs for June suggest that manufacturing sectors strengthened in Turkey, Czechia and Poland but weakened in Russia. Meanwhile, in Czechia and Poland, supply chain disruptions intensified, and there was further …
Inflation likely to resume its upward path After dipping below 2% in June euro-zone inflation is likely to rise again in the coming months, led by higher inflation in Germany. But we think it will drop back early next year and remain low beyond that. The …
30th June 2021
Recovery firmly underway Economic sentiment in the euro-zone improved sharply in June as restrictions were lifted further. Although industrial confidence was flattered by low levels of stocks, presumably relating to supply shortages, the big picture is …
29th June 2021
Economy roars back to life as restrictions lifted Polish retail sales rebounded strongly in May as restrictions were lifted, while industry continued to expand at a solid pace. GDP looks set to return to its pre-virus level in Q2 and we expect the …
22nd June 2021
Tough start to the year, but outlook brightening The weaker-than-expected 1.0% q/q decrease in Norwegian mainland GDP in Q1 confirmed that the economy slipped behind its Swedish counterpart at the start of the year, and suggests that it is now unlikely to …
12th May 2021
Slow vaccine rollout casts shadow over 2021 The third estimate of euro-zone Q4 GDP confirmed that the economy contracted a little in Q4 2020, driven by weaker consumer spending. Ongoing restrictions mean that another fall in GDP is likely in Q1, while the …
9th March 2021
Confidence likely to remain low for a while The fall in consumer confidence in November suggests that good news about the vaccine has not done much to improve sentiment in the euro-zone. With the virus still spreading quickly and lockdowns likely to be …
20th November 2020
Retail sales fall before new restrictions introduced September’s data show that euro-zone retail sales were coming off the boil even before many non-essential retailers were forced to shut up shop. Online spending will probably pick up again, but by …
5th November 2020
A bleak winter ahead The final Composite PMIs suggest that economic activity in the euro-zone flat-lined in October. But with countries throughout the region entering new lockdowns or substantially tightening restrictions in November, the euro-zone …
4th November 2020
Record growth is of no comfort The massive increase in GDP in Q3 is of no comfort to French policymakers or households, who are now contending with a second national lockdown. Indeed, we expect GDP to fall by 2.5% q/q or so in Q4. The 18.2% q/q increase …
30th October 2020
Rising order backlogs to sustain industrial rebounds While Swiss inflation has risen since reaching a trough in June, it is likely to stay very weak in the near term. Meanwhile, the positive set of September manufacturing PMIs from Switzerland and Sweden …
1st October 2020
Norwegian inflation pressures set to ease before long Signs of rising domestic price pressures in Norway raise the chance of a hawkish shift by the Norges Bank at the next meeting. However, with imported price inflation set to peak soon, and services …
10th September 2020
