Filtered by Region: Europe Use setting Europe
The wide divergence in global office market performance to-date has been driven by significant differences in the return to office and the impact that has had on occupiers’ leasing decisions. US markets have been the major losers, while those in …
29th April 2024
This page has been updated with additional analysis since first publication. Survey points to stagnant economy and still-high price pressures The weaker-than-expected EC business and consumer survey for April is a reminder that the euro-zone economy is …
This page has been updated with additional analysis since first publication. Fairly strong start to Q2 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in April, but our regional …
US aid package a (large) sticking plaster for Ukraine The $61bn US aid package for Ukraine approved this week will provide a much needed boost to Ukraine’s efforts on the battlefield, but the delays that the funding has faced over recent months casts a …
26th April 2024
Recovery in activity won’t stop ECB rate cuts This week brought some more evidence that the euro-zone economy is coming out of recession. The euro-zone Composite PMI rose more than expected in April, to a level consistent with GDP expanding slightly. …
This week the FTSE 100 broke through the 8,000 mark for the first time since its brief three-day flutter in February last year and reached a record high of 8,100. This appears to be justified based on the recent improvement in economic activity. Indeed, …
Hawkish CBR worried about upside inflation risks The hawkish communications accompanying the decision by the Russian central bank (CBR) to leave its key policy rate on hold today suggests that monetary easing will probably arrive later than we previously …
The continued decline in core inflation will make it difficult for Norges Bank to stick to its current guidance that it will leave interest rates unchanged until Q4. We suspect that the Bank will change its forward guidance next week to acknowledge the …
The latest RICS survey suggested that there was a further improvement in occupier and investment demand at the beginning of 2024. However, the big picture was one of a very weak market, reaffirming our view that rent growth will slow further and the …
25th April 2024
Foreign-born workers have been entirely responsible for the post-pandemic recovery in employment. But a gradual rise in labour market participation and a moderation in net migration may mean the share of UK-born employment starts to rise again. The risk …
Hawkish message as rates remain on hold Turkey’s central bank left its policy rate on hold at 50.00% at today’s meeting, but the statement continued to strike a hawkish tone amid persistent inflation risks in the economy. While we think the tightening …
Spanish house prices have risen 5% over the last two years despite rising interest rates. The relative affordability of houses in Spain is the main reason that the market remains strong, but the resilience of foreign demand for houses and a rising …
House price growth in London remains negative according to the ONS, but timelier measures of house prices and sentiment suggest that activity has picked up and prices are regaining momentum. The recent slight increase in mortgage rates may temper the …
The paring back of expectations for interest rate cuts in advanced economies this month has generally come alongside an upward revision to interest rate expectations across Emerging Europe. However, we think analysts may still be overestimating how far …
This page has been updated with additional analysis since first publication. Signs of life for the German economy The rise in the German Ifo in April, together with the jump in the Composite PMI in the same month, suggests that the German economy may be …
24th April 2024
We expect corporate bond yields in the UK and euro-zone to fall as rate cuts in those economies push down risk-free rates and strong risk sentiment narrows spreads further. In contrast to the weaker-than-expected PMI data out of the US today, PMIs for …
23rd April 2024
If sustained, the recent rises in market interest rate expectations and gilt yields may mean that the Chancellor has only around £5bn of fiscal headroom, down from £8.9bn in the March Budget, with which to fund further tax cuts before the next election. …
Prime office rent growth in Scandinavia is expected to moderate in the coming years as soft demand and rising supply push up vacancy. But having trailed the other Scandinavian cities in 2023, we think that tighter supply could help rent growth in Oslo …
This publication has been updated with additional analysis since the post-meeting press statement and press conference. MNB shifting down the monetary easing gears The communications accompanying the decision by the Hungarian central bank (MNB) to opt for …
Germany is in crisis. Even as near-term drags on growth are set to fade, its economy is being buffeted by a host of forces that threaten to leave it struggling through the rest of this decade. How will an aging population, high energy costs and a …
This page has been updated with additional analysis since first publication. Easing services prices may encourage BoE to cut rates in the coming months Although the unexpected rise in the composite activity PMI in April suggests the economy grew faster at …
Weak end to Q1 Poland’s weaker-than-expected activity data for March suggest the risk to our forecast for GDP growth of 2.5% y/y in Q1 (up from 1.0% y/y in Q4) are tilted to the downside. While we maintain our above-consensus GDP growth forecast of 3.0% …
Euro-zone coming out of recession The bigger-than-expected increase in the Composite PMI for April suggests that the euro-zone is coming out of recession, but this will not prevent the ECB from cutting interest rates in June. The increase in the euro-zone …
This page has been updated with additional analysis since first publication. Limited scope for tax cuts March’s public finances figures show that public borrowing in 2023/24 came in £6.6bn higher than the OBR predicted only a month ago, casting further …
New more granular MSCI data shows that the outperformance of residential property over the past decade was primarily down to student housing. Indeed, only in the past couple of years have multifamily returns exceeded that of all property. But with overall …
22nd April 2024
The past few weeks have brought a flurry of data and speeches from central bankers. What have we learned about the health of the global economy and the outlook for monetary policy? It’s important not to place too much weight on a single data point, …
Tensions increase, but hopes for de-escalation Tensions between Israel and Iran ratcheted up this week as both sides launched military strikes at one another, raising concern about a broader regional conflict. (Read our research here .) Following Iran’s …
19th April 2024
Movements in the exchange rate tend to have only a small impact on euro-zone inflation. So while the euro might weaken if monetary policy in the euro-zone and US were to diverge, we think it would take a big move in the exchange rate to have a significant …
Note: We’ll be discussing the outlook for monetary policy in the euro-zone in a Drop-In on Thursday, 25th April. Register here for the 20-minute online briefing. The financial news this week has been dominated by the potential impact of the Middle …
In the previous Weekly we said “the risks are tilted towards inflation proving sticker and rate cuts happening a bit later”. This week’s global and domestic events have left our forecast that interest rates will first be cut from 5.25% in June and will …
This page has been updated with additional analysis since first publication . Retail outlook still bright despite sales stalling in March Although retail sales volumes remaining unchanged in March was worse than expected (consensus forecast +0.3% m/m, CE …
The continued weakness in the German economy that we expect over the rest of this decade presents a challenge to the export-orientated economies of Central and Eastern Europe (CEE). While GDP growth is likely to be slower in CEE over the coming years than …
18th April 2024
We forecast that bond yields will fall back in most developed markets (DMs) over the next year or so, as central banks generally embark on bigger easing cycles than investors currently expect. But given our view that the Federal Reserve faces more hurdles …
Germany’s manufacturing sector has been in relative decline since around 2017. We think it will continue to shrink in the coming years and expect productivity growth in the sector to remain relatively low by past standards. As a result, the sector’s …
Today’s UK CPI release has not made a sustained impact on investors’ expectations over the path of Bank Rate, and the market pricing implies that investors are still discounting fewer cuts from the Bank of England (BoE) than we are. This is why we expect …
17th April 2024
We think it is most likely that future governments bring down Belgium’s budget deficit sufficiently to put its debt on a sustainable trajectory. However, the risks are that the deficit is higher than we forecast because of Belgium’s divided political …
The detailed breakdown of March’s euro-zone HICP data, released this morning, show that the early timing of Easter boosted services inflation by 0.1ppts. This effect was smaller than in previous years. Nevertheless, excluding the tourism-related sectors …
This page has been updated with additional analysis since first publication. Upside surprise, but big drop to below 2% still coming in April The smaller-than-expected fall in CPI inflation from 3.4% in February to 3.2% in March (BoE and consensus 3.1%, CE …
As the plunge in employment in Q1 is probably a response to the recession last year, employment will probably soon rebound now that the economy is growing again. The real risk is a rebound in job vacancies prevents wage growth from falling as fast and as …
16th April 2024
The ECB looks set to cut rates in June, reducing the deposit rate from 4% to 3.75%, and we think it will follow that up with rate reductions at every remaining meeting this year . The pace of cuts might slow next year as policymakers feel their way …
It wasn’t so long ago that markets would barely take note of a major summit or meeting between political leaders. These days, bilateral get-togethers are followed by a scouring of accompanying communiques for signs of shifting geo-political allegiances …
The resilience of Swiss GDP over the past two years has been largely due to the merchanting sector, which buys and sells goods without them ever entering Switzerland. Excluding that sector, the economy was smaller at the end of 2023 than it was two years …
This page has been updated with additional analysis since first publication. Weaker labour market points to weaker wage growth The sharp fall in employment and the jump in the unemployment rate in February suggest that wage growth will continue to slow …
Our analysis shows that for CPI inflation to get stuck above 2.0% it would require oil prices and UK wholesale gas prices to rise to $110 per barrel and 150 pence per therm respectively. And for CPI inflation to return to 5.0%, it would require increases …
15th April 2024
This page has been updated with additional analysis since first publication. Rise in output doesn’t improve poor outlook for industry Euro-zone industrial production rose in January, but the level of output is still weak and the outlook is poor. The 0.8% …
Ben Bernanke didn’t pull any punches in his review of the Bank of England’s forecasting/communications and recommended a full revamp of the Bank’s main forecasting model, using alternative scenarios to express uncertainties rather than fan charts and …
12th April 2024
Where the US leads, the UK often follows. So the rebound in the US CPI inflation rate from 3.2% in February to 3.5% in March and the unchanged core CPI inflation rate of 3.8% has spurred fears that the downward trend in UK inflation will soon stall. In …
Oil price rally a headache for most in EM Europe... The price of brent crude oil continued to hover around $90pb this week, near its highest level in six months, as geopolitical tensions in the Middle East added to fears over oil supply. For most …
