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Table of Key Forecasts Global Overview – The global economy has hit a soft patch with the euro-zone virtually stagnant, the US labour market flagging and China rationing its policy stimulus. We expect this weakness to persist around the turn of the year …
26th September 2024
UK 2024 October Budget …
25th September 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 …
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 …
Economies across Emerging Europe have struggled recently, and we forecast below consensus GDP growth in most countries this year. The export-orientated economies of Central and Eastern Europe will be held back by stagnating demand from key euro-zone …
SNB makes dovish 25bp cut, more to come The SNB’s decision to cut its policy rate by 25bp to 1.0% today shows that it prefers a gradual approach to policy loosening, but the accompanying statement indicates clearly that further cuts are on the way. The …
We expect equities in Germany to continue rising even though the economy there appears to be in another ‘technical’ recession. But we expect them to lag those elsewhere over the coming year or so. It looks fairly certain that Germany’s economy is in …
From pivotal central bank decisions to the most closely watched data, this is your guide to the key events and market-moving releases for the coming week. Click on the button above to view in full-screen mode. … Week-ahead …
Explore our forecasts to end-2026 for GDP growth, inflation, policy rates and commodity prices. To explore our policy rate forecasts in more detail, please visit our Central Bank Hub dashboard. If you have subscriber access to the data underlying this …
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 …
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 …
Last week I participated in a small roundtable with investors and economists. It was notable – if not entirely surprising – that the broad topics of conversation chimed with a lot of recent discussions I’ve been having with Capital Economics' clients: How …
Riksbank cuts policy rate and raises prospect of a 50bp cut this year The Riksbank’s decision to cut the policy rate by 25bp today to 3.25% was all but guaranteed, but the accompanying statement was surprisingly dovish and policymakers raised the prospect …
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
This page has been updated with additional analysis since first publication Germany back in recession The fall in the German Ifo in September adds to the evidence that the German economy is back in recession. With growth in the rest of the euro-zone also …
We think government bond yields in the euro-zone will rebound a bit, particularly in those countries, like France, where public finances are concerning. The September PMIs released today for the euro-zone and its two largest economies painted a very bleak …
23rd September 2024
This page has been updated with additional analysis since first publication. Growth slowing, not collapsing The fall in September’s composite flash PMI is probably not a sign that the economy is on the cusp of another downturn, but instead is further …
Growth softening The weaker-than-expected set of Polish activity data for August suggest that GDP growth softened over Q3. That said, we still maintain our forecast for relatively strong growth of 3.0% for this year as a whole, and this batch of data is …
After two disappointing years, recent data suggest Europe’s commercial real estate market is stabilising. But will recovery follow and how strong will it be? Join our 20-minute online session on Wednesday 25th September at 10:00 BST as we discuss the …
This page has been updated with additional analysis since first publication. Flash PMIs point to sharp slowdown The big decline in the euro-zone Composite PMI suggests that the economy is slowing sharply, that Germany is in recession and th at France’s …
The contrast between the Bank of England keeping interest rates on hold at 5.00% this week, along with the accompanying message that it will cut interest rates only gradually, and the US Fed kick-starting its easing cycle with a big 50 basis point (bps) …
20th September 2024
Note: We’ll be discussing key takeaways from our Europe Economic Outlook, including the scope of Germany’s downturn, in a Drop-In on Tuesday, 24th September . Register here for the 20-minute online briefing. The US Fed’s decision this week to cut interest …
Storm Boris floods Central Europe The flooding in Central Europe over the past week has been described as the worst in the region in the last two decades and our thoughts are with those affected. The most heavily impacted areas have been in Poland, …
Retail sector on track to support consumer spending in Q3 The unexpected large rise in retail sales volumes in August came on the back of a 0.7% m/m increase in July (revised up from 0.5% m/m) and lends some support to our view that the recent stagnation …
This page has been updated with additional analysis since first publication. Borrowing disappoints but backdrop not as dire as Chancellor suggests August’s public finances figures continued the recent run of bad news on the fiscal position, with public …
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 …
Yields have now peaked in most sectors and capital values are close to bottoming out. However, with not much prospect for yield compression the recovery will be weak by past standards. Thanks to stronger rental growth the residential sector will …
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 …
CBRT still waiting for further disinflation The communications accompanying the decision by the Turkish central bank (CBRT) to leave its policy rate on hold today, at 50.00%, were slightly more dovish than last month, but there are no clear signs to us …
For our more detailed analysis of the Bank's September policy announcement, see here . BoE underlines that interest rates will be reduced gradually By leaving interest rates at 5.00% the Bank of England showed it is more like the ECB than the Fed and is …
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 …
Norges Bank stays hawkish In contrast to the uncertainty surrounding yesterday’s Fed decision, the Norges Bank’s announcement that it is leaving its policy rate unchanged at 4.5% was correctly anticipated by all the analysts polled by Reuters, so the main …
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
Note: This Outlook was originally published on 17th September . It was updated on 1st October to reflect a revision to our ECB interest rate view . Overview – The euro-zone appears to have lost some momentum and is likely to remain sluggish in the coming …
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 …
This page has been updated with additional analysis since first publication. Rise in services inflation makes September rate cut even less likely CPI inflation stayed at 2.2% in August (consensus & CE 2.2%, BoE 2.4%), but the rise in services inflation …
We doubt the small fall in Nationwide house prices in August was the start of a renewed downturn. Surveys suggest the recent declines in mortgage rates have led to an increase in housing demand, while a significant near-term pick-up in supply appears …
17th September 2024
Overview – We have generally revised down our growth forecasts for this year and next. Weakness in the euro-zone will remain a drag on export sectors across Central and Eastern Europe (CEE) in the coming quarters, while tight policy will take some heat …
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
