Filtered by Region: Europe Use setting Europe
Following the expected 50bp interest rate cut to 1.5%, the ECB made some broadly encouraging comments about further policy support to come. No plan is in place for quantitative easing, but the Bank has not ruled anything out and will at least continue to …
5th March 2009
The particularly sharp collapse in German exports appears to reflect a combination of unfavourable transient factors, rather than a fundamental and permanent loss of competitiveness. This won’t prevent the economy from contracting very sharply this year. …
Most non-euro European commercial property markets have already seen a sizeable upward move in yields. However, as yet, there is more limited evidence of a marked downturn in occupier markets. But, as the recession gathers pace, there can be little doubt …
3rd March 2009
The euro-zone business and consumer surveys have recently begun to weaken at a less rapid pace, suggesting that the downturn may be beginning to bottoming out. Nonetheless, it is still too early to conclude that the worst of the recession is over. Both …
The latest euro-zone money data provide further worrying signs that the credit crunch is tightening its grip on the wider economy. Looking ahead, falling bank capital looks set to prompt a sustained contraction in loans to households and firms, suggesting …
26th February 2009
The rapid deterioration in the euro-zone economic outlook over the past three or four months has left our existing rental value forecasts looking too optimistic. Indeed, taking the euro-zone as a whole, peak-to-trough falls in real rental values could …
With the euro-zone recession deepening, the ECB is almost certain to deliver the 50bp interest rate cut that President Trichet signalled last month. What’s more, we expect hints of further cuts to come as concerns over rates reaching levels that are ‘too …
The latest news on the Spanish public finances shows that the hard economic landing is certainly taking its toll on the Government’s coffers. What’s more, it looks increasingly likely that a structural black hole could be emerging in its finances, …
24th February 2009
In our analysis of euro-zone commercial property markets, we base our analysis of valuations on a comparison between property yields and the yield on a 10-year German bund, regardless of whether that property is in Munich, Milan or Madrid. While that is …
19th February 2009
Concerns over Western banks’ exposure to Emerging Europe look likely to intensify as the news from the region continues to deteriorate. Both the euro and the Swedish krona could suffer further as a result. … Emerging Europe concerns likely to …
18th February 2009
The European Commission is expected to launch official procedures against France, Spain, Greece and Ireland tomorrow for their breach of the Stability and Growth Pact (SGP). Each country will surely be granted quite some time to get its finances back into …
17th February 2009
GDP data for Q4 showed the German economy contracting more sharply than that of any other euro-zone country. But while Germany is clearly suffering a deep recession, there are still good reasons to think that the Southern European economies will end up …
16th February 2009
The recent run of dreadful news from Sweden has forced the Riksbank to rip up its previous interest rate forecasts and cut interest rates from 2.0% to 1.0%. We now expect the economic recession to prompt interest rates to fall to zero or thereabouts by …
11th February 2009
The record loss reported by UBS yesterday provides further support for our long-held view that the Swiss economy will suffer heavily from its reliance on the financial services sector. This suggests that the franc is unlikely to renew its recent …
The recent falls in borrowing rates for euro-zone households and firms suggest that last year’s interest rate reductions by the ECB are already filtering through to the wider economy. While this is clearly an encouraging sign, we continue to think the …
9th February 2009
Although the ECB left interest rates on hold at 2% as expected this month, it hinted clearly that rates would fall by a further 50bp next month. What’s more, President Trichet’s dovish tone supported our long-held view that rates will eventually fall more …
5th February 2009
The recession in the euro-zone industrial sector has become even more severe. Production dropped by a further 1.6% m/m in November, leaving the annual growth rate at a record low of -7.7%. What’s more, the industrial surveys suggest that there is much …
4th February 2009
President Trichet’s continued insistence that the next “important” monetary policy meeting will not be until March has more or less ruled out an interest rate cut this month. We still think that weak activity and the prospect of a sustained period of …
29th January 2009
After the UK Government’s latest announcement of additional measures to support banks, policy in the euro-zone is lagging behind again. We hope that extra support will be announced in time, but the slow response so far highlights the risk that inactive …
22nd January 2009
The outlook for the European economy has worsened dramatically as the export-dependent industrial sector has slumped in the face of collapsing global demand. Although falling inflation should boost households’ spending power, this may be limited by a …
21st January 2009
There is still no universally accepted single cause of the Great Depression. But our analysis suggests that the main culprit for the role of catalyst was the bursting of the bubbles in the equity and commodity markets, accompanied by falling house prices. …
19th January 2009
While the ECB cut interest rates as expected today, it’s warnings that it will not reduce them again at its next meeting confirm that it will continue to drag its heels compared to other central banks, raising the risk of an unnecessarily deep and …
15th January 2009
The latest news from Spain shows that the housing market downturn is gaining momentum as the economy enters recession. Further sharp falls over the coming quarters are inevitable and we expect house prices to fall by at least one third from peak to …
The latest economic data have been pretty awful. Output in the industrial sector is plummeting in response to weakening global demand. What’s more, there is only limited evidence so far of a boost to consumer spending from falling inflation. With the …
13th January 2009
Hopes that the euro-zone’s relative lack of indebtedness would allow it to fare comparatively well in the global downturn have been dashed by the slump in the industrial sector and insufficient policy action. The region may now be among the last to emerge …
Given the latest sharp fall in inflation and mounting evidence that the euro-zone economy is in the midst of a severe downturn, we see the ECB cutting interest rates by 50bp this month. Indeed, as it becomes clear that the recession will be worse than the …
8th January 2009
Over the next two years, we expect the best performing euro-zone commercial property markets to be Greece, Finland and Portugal. All are forecast to deliver better total returns than core markets such as Germany and France. But have we under-estimated the …
19th December 2008
The latest signal from the US Federal Reserve that it plans to adopt an even more aggressive policy of quantitative easing has fuelled speculation over what other central banks like the ECB might do to support their economies. In fact, the ECB is already …
18th December 2008
Quantitative easing (QE) is a potentially very powerful tool that could pull economies out of recession and deflation. However, to work fully it may have to be combined with additional measures to encourage the banks to lend or, as a last resort, a …
17th December 2008
Much of Europe faces a year of contracting GDP, falling profits and rising unemployment in 2009 and, perhaps 2010. In the Euro-zone, we expect a widespread contraction in GDP, but, with the exception of Ireland and Spain, most of the Euro-zone should grow …
12th December 2008
The German Government has come under attack from the press and other European leaders for its apparent reluctance to provide its ailing economy with a fiscal boost. In fact, it has done more than is commonly perceived, although there is clearly scope for …
11th December 2008
After today’s expected 50bp interest rate cut, the bottom end of the Swiss National Bank’s target range for three-month interest rates has already hit zero. For now, the Bank will target a rate of around 0.5%, in the middle of its range, but as the …
Despite the recent weakness in the region, there are still reasons to think that at least some parts of Europe might suffer a shallower and shorter downturn than that underway in the United States. But much rests on the policymakers. … Just how heavily …
With very few exceptions, total returns in noneuro European commercial property markets are, on average, forecast to be negative in 2009 and 2010, before recovering in 2011 and beyond. (See Charts 1 to 8 on page 3). Although Ireland and Spain will buck …
10th December 2008
Over the next two years, falling capital values, generated by rising yields mean that total returns are likely to be low or even negative in many Euro-zone property markets with the smaller markets the most likely to buck that trend. On average, in 2009 …
The ECB’s 75bp interest rate cut to 2.5% is an encouraging sign that the Bank recognises the severity of the economic downturn after earlier hints that a more modest reduction was likely. Although President Trichet refused to give any clear signal of …
4th December 2008
The decision by the Swedish Riksbank to slash interest rates by 175 basis points highlights the degree to which the economic outlook has deteriorated. With the downturn set to worsen next year, further interest rate cuts seem likely. … Swedish interest …
Recent data suggest that the euro-zone economic downturn is gathering pace. Not only do the latest business surveys point to further steep falls in industrial output, but they also indicate that service sector output could soon begin to decline on an …
3rd December 2008
The recent surge in the spread between peripheral euro-zone government bond yields and the equivalent German yield is to a large part down to rising risk aversion in the financial markets. But the relatively healthy outlook for the German economy and …
2nd December 2008
The Italian Government’s announcement of an economic package to help reinvigorate the economy suggests that Prime Minister Berlusconi may have reverted to his free spending ways. But the package looks set to provide a far smaller stimulus to the economy …
28th November 2008
The latest Spanish fiscal package shows that the Government is willing to pull out all the stops to prevent a steep economic contraction. But with the effects on the economy of the housing market downturn and slowing external demand some way from their …
27th November 2008
While governments across the developed world are stepping in to shore up their ailing economies, the fiscal boost in the euro-zone looks set to be fairly modest. With a gradual economic recovery likely to start sooner than in the US or the UK, the …
While the latest comments from the ECB suggest that it is not prepared to slash interest rates quite as aggressively as some other central banks, at least another 50bp reduction this month seems like a near certainty. A worryingly sharp drop in business …
For clients of our new European Commercial Property service, this note provides a guide to our philosophy and forecast methodology. In short, our approach to analysing and forecasting commercial property is top-down. It is an approach that has served us …
26th November 2008
The European Commission’s call for a fiscal stimulus of 1.5% of GDP makes little difference to the economic outlook. Indeed, some European governments will argue that they have already done enough. Nonetheless, the economic downturn looks set to put a …
The joke about the differences between Iceland and Ireland (one letter and about six months) might provide some encouragement to the latter in the light of recent signs that Iceland is turning the corner. But the economy still faces major challenges. … …
20th November 2008
Iceland’s $4.6bn IMF-led rescue package will provide the economy with much-needed funds to help cover its external financing requirement. But it will not be enough to prevent a severe and prolonged economic slump. … Iceland: Outlook bleak, despite IMF …
