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Higher US tariffs will be a substantial drag on the euro-zone economy this year. Looser fiscal policy in Germany will give a small boost in 2026, but overall we expect the euro-zone to grow fairly slowly in the coming years. We also think that the tariffs …
9th April 2025
Europe Chart Pack (April 2025) …
8th April 2025
Last week we held a series of roundtable discussions with clients in our London office about how the pandemic will shape real estate into the 2030s. This note shares our answers to some of the most interesting questions raised, covering the pandemic’s …
Israel holds rates steady ahead of Trump-Netanyahu talks The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, and sounded a bit more hawkish than at its previous meeting despite highlighting possibly quite a large hit to economic …
7th April 2025
Tariffs unlikely to bring forward rate cuts The communications accompanying the decision by the National Bank of Romania (NBR) to leave its policy rate on hold today, at 6.50%, highlighted two-sided risks to inflation and economic activity from US trade …
The tariff storm is far from over. President Trump and some of his key officials used the weekend to dig in their heels on his ‘Liberation day’ tariffs, and European and Asian markets have fallen heavily again on Monday while S&P 500 futures point to …
Retail sales picked up in February This publication has been updated with additional analysis Euro-zone retail sales rose in February for the first time since September last year, and we expect consumer spending to grow at a modest pace over the coming …
This page has been updated with additional analysis since first publication. Housing market loses steam in Q1 The 0.5% m/m fall in Halifax house prices in March provides further evidence that the boost from buyers rushing to complete home purchases before …
German industry already weak of tariff hit The fall in German industrial production in February left it very weak. With US demand generating around 7% of German manufacturing value added, the sector will be hit hard by US tariffs. And higher defence and …
If the US tariffs on imports from the EU announced this week are kept in place, our current assessment is that this will lower GDP growth across Central and Eastern Europe (CEE) by 0.3-0.4%-pts on average over the coming year. Judging by the sharp …
4th April 2025
President Trump’s decision to hit the EU with a 20% tariff on all imports has roiled European markets – the Euro Stoxx is down more than 7% since the announcement – and pose a growing risk to the global and European economies. Our forecast before the …
With President Trump announcing reciprocal tariffs of 34% and 20% on all US imports from China and the European Union respectively this week, the news that UK goods exports to the US will be subject to the minimum 10% “baseline” tariff from 5 th April …
Rising interest rates and costs weigh on construction activity The headline CIPS construction PMI saw a small rise in March to 46.4, from 44.6 in February. But that still left the balance below 50 and consistent with a contracting construction sector. …
There has been a marked dovish shift on th e Polish National Bank’s (NBP’s) MPC and it now looks like interest rate cuts will come this year , rather than in 2026 as we'd previously thought . But we think this will be another punctuated cycle of interest …
Underlying inflation to remain elevated for the rest of the year Despite easing in March, CPIF inflation excluding energy remained elevated and is likely to remain high throughout this year. We are forecasting the Riksbank to keep its policy rate at 2.25% …
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
If the 20% US tariff on the EU is sustained it is likely to reduce economic activity in the euro-zone by more than the 0.1-0.2% of GDP we had previously assumed. The impact on inflation should be small but risks to growth and confidence cement the case …
Softer inflation gives CBRT some breathing space The softer-than-expected Turkish inflation figure for March, of 38.1% y/y, suggests that the sell-off in the lira last month hasn’t exerted significant upwards pressure on consumer prices (yet). And as …
This page has been updated with additional charts and analysis. Inflation steady, but outlook weaker on tariffs Switzerland’s inflation rate was unchanged in March, but that news has been overshadowed by the much higher-than-expected tariffs announced by …
The easing in house price growth in both February and March suggests momentum in the housing market is waning. What’s more, as we now think the Bank of England will press pause on the interest rate cutting cycle later this year, mortgage rates may fall a …
2nd April 2025
Our scenarios of how different rates of US tariffs on UK exports could influence the UK are designed to provide clients with some real-time context when President Trump announces tariffs tonight. These are rough rules of thumb for blanket tariffs on all …
Quick action by the Turkish central bank appears to have stemmed pressure in Turkey’s financial markets after the recent sell-off. But the rapid depletion of FX reserves means that policymakers have less scope to act in the event of a renewed spike in …
NBP remains on hold, although case for rate cuts starting to build The National Bank of Poland (NBP) left is policy rate on hold again today, at 5.75%, and while our forecast is for policy settings to remain unchanged throughout 2025, the risks of an …
Note: We'll be discussing how the pandemic continues to shape UK and European real estate markets at 9:00 BST/10:00 CET on Tuesday 8th April. Register here for the 20-minute online briefing. Five years since the onset of the pandemic, the share of remote …
We think Germany is likely to raise defence spending by around 1.5% of GDP between 2024 and 2027. With the government unlikely to cut other spending much and the defence industry well placed to raise output quickly that could add 1.2% to GDP over that …
With demand for LNG unlikely to keep pace with the looming surge in supply over the coming years, a glut of natural gas will weigh heavily on benchmark prices in Asia and Europe. Our forecasts for prices to fall to pre-pandemic levels over our forecast …
Services inflation down sharply March’s big decline in euro-zone services inflation strengthens the case for the ECB to cut interest rates at the meeting on 17 th April. The small fall in euro-zone headline inflation from 2.3% in February to 2.2% in March …
1st April 2025
Central Europe recovering, Russia faltering The rise in the manufacturing PMIs in Central Europe in March adds to evidence that the region is recovering from its recent soft patch. In contrast, the drop in Russia’s PMI suggests the economy may be starting …
This page has been updated with additional analysis since first publication. House prices continue to lose momentum The stagnation in Nationwide house prices in March suggests any boost from buyers rushing to complete home purchases ahead of the rise in …
While the recent outperformance of euro-zone stocks relative to US ones may have a bit further to run, we doubt European equities would hold up in absolute terms if US stocks fell much further. The renewed sell-off in the US stock market has added to its …
31st March 2025
Our View: The economies of Central and Eastern Europe appear to have ended Q1 on a positive note, and Germany’s fiscal U-turn has improved prospects for regional export demand – we have recently revised up our GDP growth forecasts slightly for this year …
Likely fall in services inflation points to April cut National inflation figures released so far suggest that euro-zone headline inflation edged down in March. Services inflation probably also fell, which will please ECB officials. The fall in German …
Overview – We’ve become more concerned about the outlook for the economy due to the drags from higher businesses taxes and the more uncertain global backdrop being bigger than we thought and the boost from government spending being smaller. Our forecasts …
The US would have to exert a lot of pressure to coerce most major countries into putting large tariffs on goods from China . Curtailing trade with China would have an economic cost and even countries that have closer economic ties with the US would still …
The recent scrapping of the carbon tax in Canada shows that the political pushback against climate policy is certainly not just confined to the United States. But to paraphrase Mark Twain, rumours of the death of climate policy are greatly exaggerated; …
The President is calling it “Liberation Day”, but nobody knows exactly what the White House will come up with when the long-awaited reciprocal tariffs plan is finally unveiled on 2nd April – including, it seems, the administration itself. Initial …
This page has been updated with additional analysis since first publication. Tentative signs households may be starting to spend a bit more freely February’s money and lending figures provide some green shoots of households starting to save less and spend …
Net lending to property rises to close to a 5-year high Net lending to property continued its recent run of strength in February, with total lending of £1.58bn up from £917m in January and the highest monthly figure since May 2020. As usual the rise was …
The UK may have one of the most shielded economies against US tariffs. But stagflation and fiscal risks at home provide strong headwinds for its bond market. The UK is likely to get to the other side of US tariffs unscathed compared to other economies . …
28th March 2025
With all the major business surveys for March now published, it is clear that while sentiment in the euro-zone has jumped, activity is still growing slowly at best. The more sentiment-driven ZEW and Sentix indices recorded big increases but the Composite …
Tariffs – UK still not very exposed The announcement of US reciprocal tariffs on 2 nd April will dominate next week. The UK has mostly flown under the radar of Trump’s tariffs and its economy is naturally less exposed than others – our Trade War Dashboard …
Autos now in the crosshairs The Trump administration’s announcement of a 25% import tariff on autos and some auto parts will have a particularly large impact on Hungary and Slovakia. Our detailed response on Thursday to the tariff news can be found here . …
Net immigration to the euro-zone has been very high in recent years, and the risks are skewed towards it exceeding the European Commission’s projection of 0.3% per year over the long term. The historical trend suggests it could average 0.4%-0.5% while a …
This publication has been updated with additional analysis Growth still weak, but price pressures remain The EC survey for March shows a deterioration in business and consumer sentiment in the euro-zone, consistent with GDP doing little more than stagnate …
Given our view that the rise in yields outside Germany will not match the recent increase in Bund yields anytime soon, we are revising down our forecasts for euro-zone spreads. That said, we still expect spreads in France, Italy, and Belgium to widen due …
This page has been updated with additional analysis since first publication. Bumper rise in retail sales suggests households may be spending more freely Today’s deluge of data confirmed that the economy was weak even before the full effects of higher …
Overview – We’ve raised our GDP growth forecasts across most of the region for this year and think that Central and Eastern European (CEE) economies will pick up pace going into 2026, despite the headwind from US tariffs. An end to the war in Ukraine …
27th March 2025
Emerging Markets Capital Flows Monitor (Mar. 2025) …
Table of Key Forecasts Global Overview – We expect the world economy to grow a touch slower in the next couple of years than it did in 2024. Trump’s policies will drag on US growth, policy support will not prevent a slowdown in China’s economy, and looser …
