Filtered by Region: Europe Use setting Europe
Non-high street retail subsectors have seen a stronger rental recovery from post-pandemic lows than high street shops. And we think this outperformance will continue given tighter availability and slightly more favourable demand drivers. That said, there …
3rd October 2024
One way the US election could influence the UK economy would be if Donald Trump won and delivered on his pledge to put a 10% tariff on UK exports being sent to the US. We suspect the impact on UK activity from such a policy would be small (and perhaps …
2nd October 2024
We now expect the ECB to cut interest rates by 25bp at each of its next four meetings, taking the deposit rate down from 3.5% currently to 2.5% in March. Following Christine Lagarde’s comments to the Committee on Economic and Monetary Affairs yesterday, …
1st October 2024
Tight supply conditions have boosted German prime logistics rents despite weak occupier demand. This looks set to continue over the next year or two given completions pipelines for the German markets are among the tightest in Europe. However, weak …
26th September 2024
Ahead of COP29 in November, discussions have been taking place at events in London and New York this week on all things climate. We attended the LSE’s Environment Week to hear the thoughts of academics and policymakers on carbon offsets, CBAM, and US …
France’s new government suggested yesterday that the budget deficit will be over 6% of GDP this year, rather than the 5.6% as indicated only a couple of weeks ago. We expect the government to struggle to pass a budget which substantially reduces the …
The leisure sector is yet to show signs of recovery from the cost-of-living crisis, in part because still-cautious households are prioritising buying goods rather than expensive leisure services. But a relatively large squeeze on higher-earning …
While the SNB only cut the policy rate by 25bp today to 1.0%, the accompanying statement was very dovish and indicated that there are at least two more rate cuts on the way, probably in 25bp increments in December and March. Despite the emphasis on the …
CNB cuts by 25bp again, easing cycle has further to run The decision by the Czech National Bank (CNB) to cut its policy rate by a further 25bp today, to 4.25%, was followed by communications which, on balance, felt a bit more dovish than at the last …
25th September 2024
We held an online Drop-In session this week to discuss the outlook for the euro-zone. (See a recording here .) This Update addresses some of the questions that we received, including some that we didn’t have time for during the event, starting with …
The Riksbank’s decision to cut by 25bp today to 3.25% was all but guaranteed, but the accompanying statement was surprisingly dovish. Policymakers said the policy rate could be cut faster and further than previously indicated, while also raising the …
Easing cycle resumes ... for now The communications accompanying the decision by the Hungarian central bank (MNB) to resume its easing cycle today suggests that the central bank could pause interest rate cuts again very soon. We expect just one further …
24th September 2024
We think SNB Chairman Thomas Jordan will probably use his last meeting to once again surprise markets by cutting the policy rate by 50bp to 0.75%. Policymakers will be unhappy with the franc’s recent appreciation and will use rate cuts to try and stifle …
19th September 2024
While UK Gilt yields might rise a bit further in the near term, we think that they will fall back before long, as the Bank of England eventually delivers more rate cuts than most anticipate. After delivering a first cut in August, the Bank of England left …
We’ll be discussing the differences in the policy outlook for the Bank, the ECB and the Fed in a 20-minute online briefing at 3pm BST today. (Register here .) By leaving interest rates at 5.00% the Bank of England showed it is more like the ECB than the …
The Norges Bank left rates unchanged today and shifted its guidance only very slightly in a dovish direction. Whereas the Bank does not expect to cut rates until Q1 next year, we think it is likely to do so in December and to then cut rates fairly rapidly …
Unlike their counterparts in the Fed, policymakers at the Riksbank have ruled out making a bumper 50bp rate cut anytime soon. Instead, they are likely to cut their key policy rate by 25bp at next week’s meeting. Further ahead, we think the Riksbank will …
18th September 2024
We doubt the announcement by Amazon that it is requiring office-based workers to return full-time marks the start of a reversal in the remote work share. It is far from clear that requiring five days a week in the office raises worker productivity and it …
We recently held a series of EM-focused client meetings in Switzerland and Germany which covered a wide range of topics, including the impact of global fracturing , AI and the green transition on emerging markets. This Update answers several of the …
16th September 2024
By making life harder for unscrupulous landlords, the Renters’ Rights Bill may help drive tenant demand toward institutional landlords who are already complying with most aspects of the proposed legislation. That said, an apparent ‘win-win’ ability for …
13th September 2024
A large part of the decline in euro-zone industry over recent years shown by the monthly data appears to be due to mismeasurement. Nevertheless, the sector is struggling with a loss of international competitiveness and the medium-term outlook is poor. …
Inflation keeps falling more quickly than Norges Bank’s forecasts but policymakers will be uneasy about the renewed weakening of the krone. We expect them to repeat that the policy rate will be unchanged “for some time ahead”, but we think they will opt …
12th September 2024
There was never any doubt that the ECB would cut its deposit rate by 25bp today, to 3.5%. Meanwhile, the policy statement and press conference were largely as expected and do not change our view that the next rate cut is most likely to be in December – …
Rising demand points to faster house price growth August’s RICS survey provided further evidence that housing demand is picking up in response to the recent falls in mortgage rates. What’s more, our view that Bank Rate will be lowered by more than …
Milan office take-up has held up well in recent quarters, but this has not translated into stronger prime rental growth. With the outlook for jobs growth pointing to a slowdown in take-up while downsizing and affordability concerns are rising, we think …
11th September 2024
Our rental growth forecasts for the industrial and retail sectors are notably above the consensus, particularly over the next couple of years. That primarily reflects our relatively optimistic forecasts for GDP growth, where a recovery in consumer …
10th September 2024
Granular data showed that mortgage lending continued to recover in Q2, supported by a decline in the average mortgage rate on new lending. Our view that mortgage rates will fall further next year suggests demand will continue to pick up and housing …
In principle, an increase in EU integration and cooperation, as proposed by Enrico Letta in April and Mario Draghi today, could increase output in the long run. But any progress will be slow, and the proposals are unlikely to be implemented in full. …
9th September 2024
The latest IPF Consensus Survey showed forecasters are finally coming around to our long-held view that retail will preform relatively well over the next five years. Total returns for all the retail subsectors over 2024-28 saw significant upgrades, with …
6th September 2024
The most recent European industrial take-up figures were slightly more encouraging. We expect activity will continue to slowly improve over the next couple of years, supported by the consumer recovery and increasing online penetration, though no return to …
5th September 2024
The latest drop in oil prices, coupled with our expectation for global demand to remain weak, will make it practically impossible for OPEC+ to increase output while keeping Brent crude prices above $80pb. Recent reports indicate the group is undecided on …
4th September 2024
Recent estimates add to the evidence that online retail shares are growing more slowly across Europe. There has also been little sign of convergence in online shares, supporting our long-held view that online competition will be less of a drag on southern …
3rd September 2024
Belgium's political crisis and high budget deficit have largely gone unnoticed in past couple of months while all eyes have been on France. This Update answers some key questions about its political situation and prospects for fiscal policy heading into …
30th August 2024
Prime office rents look set to rise by more than we had previously expected over the next few years given still low CBD vacancy, preferences for prime space and cuts to the supply pipeline in 2025-26. While we still expect rental growth to slow, our …
29th August 2024
The ongoing reassessment of the monetary policy outlook in the US and Europe has (again) made the UK look like an outlier. We doubt that will last. Since the start of the summer, expected interest rates have fallen significantly in most major economies, …
28th August 2024
City offices have underperformed their West End neighbours by a wide margin since 2022. More encouraging recent data have led us to revise up our City rental projections, but we still expect stronger gains in the West End over the forecast horizon. …
Capital Markets Union (CMU) is regarded by many European policymakers as one of the key reforms needed to close the gap between EU and US productivity. But a full CMU is a long way off, and in any case fragmented capital markets are just one source of …
Rates left on hold, easing cycle will be more “stop-start” from here The Hungarian central bank (MNB) suggested that its decision to leave the policy rate on hold today, at 6.75%, was likely to mark a temporary pause in the easing cycle, rather than an …
27th August 2024
Although the EU is making progress in expanding its semiconductor production capacity, including through a new plant in Dresden, it is still a long way behind the US and Asia and is unlikely to catch up anytime soon. This will keep the EU reliant on …
23rd August 2024
The scale of the fall in negotiated wage inflation in Q2 was largely due to one-off payments made in Germany in March but not repeated in Q2. However, the underlying trend in wage inflation is clearly downwards and is a good reason to expect the ECB to …
22nd August 2024
We don’t think the slew of inflation-busting public sector pay deals that have been agreed by the new government will prevent wage growth from slowing next year to the rates of 3.0-3.5% we think are consistent with the 2.0% inflation target. But the big …
21st August 2024
There are good reasons to expect services inflation to start falling again towards the end of this year and in 2025. But as long as wage growth remains high, services inflation will stay strong too. This morning Eurostat published the full breakdown of …
20th August 2024
We think the Riksbank will follow today’s 25bp rate cut with a cut at each of the three remaining meetings this year to take the policy rate to 2.75%. But we expect the terminal rate to be 2.5% which will be reached in early 2025. This is higher than the …
Israel’s economy slowed more than expected in Q2 as weak investment and supply constraints continued to hold back activity. A ceasefire to halt the conflict in Gaza would clearly be positive for the near-term growth outlook, but we doubt the economy would …
19th August 2024
While expectations for interest rates in the UK have already fallen by 40bp by end-2025 since mid-July, our projections for UK CPI inflation to remain below the 2% target for much of 2025 and 2026 suggest to us that the Bank of England (BoE) will ease …
15th August 2024
Given the revival in house prices and recent falls in mortgage rates, we are raising our Q4 2024 house price growth forecast from 1.0% y/y to 2.0%. We now think that the number of housing transactions per year will increase from 1.02m in 2023 to 1.07m in …
Despite better occupier data in H1, the weak consumer backdrop and still elevated vacancy mean we expect German retail rents to only hold steady this year. Thereafter, we expect rental gains to lag the euro-zone average, especially in Frankfurt given the …
Norges Bank’s decision to leave its policy rate unchanged at today’s meeting, at 4.5%, was never in doubt. However, we still suspect that continued declines in inflation will allow it to start cutting before the end of the year, which would be earlier …
Since the Riksbank’s last meeting in June, Swedish inflation and activity data have been weaker than policymakers expected. We think this will encourage them to cut the key policy rate from 3.75% to 3.5% next week and to indicate at least a further 50bp …
14th August 2024
Commercial property investment is on track to hit our forecast for a rise of 20% this year, helped by a substantial rise in retail transactions. A decent rental growth outlook coupled with attractive valuations, particularly for shopping centres, is …
