Filtered by Region: Europe Use setting Europe
Our view that the euro-zone economy would fare relatively well in the global downturn has been undermined by the latest news on Germany and the deterioration in the business surveys. It now looks likely that the euro-zone will be the first major economy …
6th August 2008
Ongoing fears over the inflation outlook will leave the ECB in a fairly hawkish mood for now. But recent signs that the economy is stagnating (at best) support our view that interest rates will not rise further. Indeed, with easing energy effects and …
31st July 2008
The latest evidence of rising German wages growth suggests that households’ real incomes are receiving some much-needed support. But we still expect slowing activity to prevent wages growth from rising much further. And with consumer confidence falling …
29th July 2008
In recent months, the outlook for the Italian economy has deteriorated at an alarming pace. While economists are unanimous in their view that Italy will continue to lag well behind the euro-zone, we remain particularly gloomy. Indeed, unless Italy can …
28th July 2008
Our long-held view that the European economy will fare relatively well during the current global economic downturn has come under threat from the surge in inflation in the region. Not only has the squeeze on households’ real income reduced the chances of …
16th July 2008
The latest housing market data from Spain revealed that house prices have begun to fall. Over the coming quarters, we expect the slowdown to pick up pace, causing a further downturn in the construction and household sectors which should bring the economy …
15th July 2008
A softer tone from the European Central Bank has supported our view that today’s interest rate hike will not be the first in a series. Indeed, given more signs lately of a marked slowdown in economic activity in the region, we still expect the next move …
3rd July 2008
The decision by the Riksbank to raise interest rates from 4.25% to 4.50% was widely expected, but the Bank’s signal that rates could rise twice more this year shows that it believes the economy will need to slow sharply in order to contain inflationary …
The latest data have provided further evidence of a marked slowdown in euro-zone economic activity. The key business surveys turned down in June, suggesting that growth in Q2 will nowhere near match Q1’s 0.8% gain. But despite the weaker outlook for …
2nd July 2008
Spanish football may be flying high at the moment, but Spain’s industrial activity indicators have recently divebombed, adding to the economy’s mounting woes. … Industrial sector adding to Spain’s …
1st July 2008
The contraction in the Irish economy in Q1 confirmed that the boom of the last decade has finally turned to bust. It seems very likely that the economy is heading into a property-led recession. … Ireland heading for …
30th June 2008
The ECB will deliver the signalled interest rate hike this month, despite further evidence of a slowdown in economic activity in the euro-zone. Inflation fears could keep the Bank in hawkish mode for a few months yet. But we do not expect July’s hike to …
26th June 2008
The Norges Bank’s decision to raise interest rates again today clearly shows that it remains concerned about rising inflationary pressures. This will support the Norwegian krone in the near term. … Norges Bank responds to inflation …
25th June 2008
nd’s dependence on the troubled financial services sector points to the risk of an extremely hard landing. We think that the consensus forecasts for Swiss GDP growth are much too complacent and see the economy suffering an outright recession this year. … …
24th June 2008
Switzerland’s dependence on the troubled financial services sector points to the risk of an extremely hard landing. We think that the consensus forecasts for Swiss GDP growth are much too complacent and see the economy suffering an outright recession this …
The Swiss National Bank’s decision to leave its target range for three-month interest rates on hold (at a mid-point of 2.75%) was a relief amid concerns that inflation fears might force the Bank to hike rates. Comments accompanying the decision do not …
19th June 2008
The Swiss National Bank’s decision to leave its target range for three-month interest rates on hold (at amid-point of 2.75%) was a relief amid concerns that inflation fears might force the Bank to hike rates. Comments accompanying the decision do not …
The further fall in Swedish house prices in May adds weight to our view that household spending growth will slow sharply this year. This should ultimately prompt the Riksbank to cut rates in 2009. But with CPI inflation at a 15-year high, another rate …
16th June 2008
A “no” vote in Thursday’s Irish referendum on the EU’s Treaty of Lisbon would put a spanner in the works of the Treaty’s ratification process. Just as importantly, it may add to concerns that the region’s economic divergences are increasing political …
11th June 2008
The European Central Bank sent a strong signal today that it is likely to raise interest rates in July or August. But the Bank’s inflation phobia clearly increases the risks of a sharp slowdown in the eurozone economy next year, implying that interest …
5th June 2008
The strong pick-up in euro-zone GDP in Q1 brought further evidence that the region is performing well compared to the slowing US and UK economies. Admittedly, part of the 0.8% quarterly increase reflected temporary factors, which might be unwound in Q2. …
4th June 2008
The recent run of bad news from Spain suggests that consumers’ wallets will remain firmly closed this year. While the Government’s fiscal package may provide households with a temporary boost in the second half of this year, it will not be able to offset …
3rd June 2008
Concerns about the health of the Swedish banking system have increased further in response to a growing threat of an exchange rate devaluation in the Baltics. While the impact of such a devaluation on the Swedish banking system may be exaggerated, rising …
ECB President Trichet will maintain a familiarly hawkish tone at June’s press conference, perhaps adding to speculation that interest rates could yet rise further. We still expect inflation to moderate towards the end of this year as slowing activity …
29th May 2008
The Spanish banking system looks in relatively good health compared to those of some other eurozone economies. Nonetheless, a major adjustment in the domestic property sector could still cause banks serious problems and exacerbate the downturn in the …
27th May 2008
The unexpected rise in the Danmarks Nationalbank lending rate highlights the Bank’s commitment to keep the Danish krone tightly pegged to the euro. … Weaker currency prompts action by Danish central …
16th May 2008
Recent divergences in borrowing rates across different countries suggest that the impact of the credit crunch on households and corporates may be hitting some euro-zone economies harder than others. … Bank lending rates add to diverging growth …
8th May 2008
The European Central Bank’s decision to leave interest rates on hold clearly reflects ongoing concerns about the inflation outlook. What’s more, with no sign of any softening in the Bank’s hawkish tone at today’s press conference, it looks like the first …
Evidence of a moderate slowdown in euro-zone economic activity has mounted in the past month, with even those survey indicators that were previously most optimistic taking a turn for the worse. After a sharp fall in April, the EC’s Economic Sentiment …
7th May 2008
The narrowing in the spread between Club Med and German government bond yields over the past month is an encouraging sign that things could be returning to normal in the euro-zone bond markets. But with the economic outlook in southern Europe having …
In the year since his election, French President Nicolas Sarkozy has failed to live up to the French public’s great expectations, but he has achieved more than he is given credit for. Provided that he sticks to his guns, M. Sarkozy’s plans for economic …
6th May 2008
Speculation is growing that the euro’s extended rally against the US dollar and UK pound is finally at an end. But with the euro-zone economy in fundamentally better shape than those of the US and UK, we doubt that the euro is about to fall too sharply. … …
2nd May 2008
We expect the lack of a significant softening in the ECB’s hawkish tone at May’s press conference to confirm that the Bank is unlikely to cut interest rates for some months yet. But as the economy slows further and inflation concerns fade, we still expect …
1st May 2008
The outlook for the European economy remains relatively bright compared to the major downturn underway in the US. Nonetheless, divergences are widening between those economies subject to US-style consumer imbalances – including the UK, Spain and Ireland – …
30th April 2008
The European Central Bank’s continued hawkishness suggests that euro-zone interest rates are now unlikely to fall before the third quarter of this year at the earliest. But we still think rates will eventually fall rather further than the markets …
24th April 2008
As expected, the Swedish Riksbank kept interest rates on hold today while the Norges Bank raised rates to 5.50%. But while the markets apparently see little chance of rates falling in 2008, we expect slowing activity to lead both Banks to start to cut …
23rd April 2008
The latest news on the Spanish housing market supports our view that it is only a matter of time before house prices fall sharply with significant adverse effects on the wider economy. … Spain’s fiscal boost won’t offset the housing market …
18th April 2008
There are growing concerns that the credit crunch could trigger a sharp downturn in European housing markets with significant adverse effects on the wider economy. But while euro-zone house price inflation looks set to slow sharply, the impact on …
17th April 2008
Silvio Berlusconi’s emphatic victory in the Italian general election ends two months of political uncertainty. But the deteriorating economic outlook and Berlusconi’s poor past stewardship of the economy suggest that Italy will continue to lag well behind …
15th April 2008
After leaving interest rates unchanged for a tenth consecutive month today, the European Central Bank maintained a tough stance on inflation. But with the economy clearly slowing and the Bank hinting that it has become more concerned about the euro’s …
10th April 2008
Recent data have provided reassurance that, in comparison to the US and UK, the euro-zone is experiencing a relatively moderate slowdown in activity. But there are growing signs of a north-south divide emerging amongst the region’s major economies. On the …
9th April 2008
The recent stream of write-downs by German banks might look like a worrying sign that the crisis in financial markets is set to have a devastating impact on the economy. But there are a number of reasons not to be too worried about the German banking …
8th April 2008
Recent news on the Irish economy has supported our view that expectations of a relatively soft landing after the boom of the last decade are too optimistic. We now expect the economy to grow by just 1.5% or so this year, with a real chance of an outright …
3rd April 2008
The sharp fall in the latest indicators of Spanish business activity provides further evidence that the economic slowdown has spread well beyond the housing-related sectors. We maintain our view that Spain is heading for a pretty hard landing. … Slump in …
The ECB seems likely to maintain a hawkish tone at April’s Governing Council meeting and press conference, suggesting that it has no immediate plans to cut interest rates. But as the economy slows further and inflation concerns fade, we still expect …
The Norges Bank’s decision to leave interest rates on hold but signal that it expects to raise interest rates once more this year is likely to lead to a further strengthening of the krone. … Norges Bank signals the possibility of a further rate …
13th March 2008
After leaving interest rates on hold as expected (at a mid-point of 2.75%) the Swiss National Bank stressed that it expects economic activity to slow sharply this year. While strong price pressures will prevent aggressive policy loosening, we still expect …
