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We’re nudging up our forecasts for equities in most non-US developed markets, partly in response to our upwardly revised projections for the S&P 500 . But we still think they’ll lag equities in the US, if perhaps less significantly than they did earlier …
30th May 2025
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Europe is being buffeted by geopolitical and geoeconomic shifts but, …
Encouraging signs for the rebalancing process The slowdown in Turkish GDP growth, to 1.0% q/q, in Q1 and, more importantly, the fact that net trade is propping up growth provide positive signs that policymakers’ efforts to rebalance the economy and bring …
U-turns on benefit and welfare spending, increased pressure to ramp up defence spending and higher borrowing costs have left the Chancellor, Rachel Reeves, in a sticky position. If she wishes to avoid a political backlash and/or an adverse reaction in the …
29th May 2025
The surplus in the EU carbon market dampened incentives to decarbonise in 2024, and the likelihood that the surplus is maintained until 2027 will keep a lid on carbon prices in the near term. Further ahead, a sharp contraction in the supply of carbon …
Emerging Markets Capital Flows Monitor (May 2025) …
Strong, but not unanimous support for June cut. Opinion is divided on what to do next. An early exit by Lagarde would not cause sudden shift in policy. A 25bp interest rate cut next week, taking the deposit rate to 2.0%, looks very likely. But divisions …
Leading indicators suggest most of the recent weakness in housing demand and prices is due to the temporary influence of the change in stamp duty rather than any longer-lasting influence of the softer outlook for the UK economy. This lends support to our …
Yesterday’s US court ruling has added yet more uncertainty to the EU-US trade relationship and at face value has weakened President Trump’s position. But the risk of tariffs remains very real not least because sectoral tariffs, which are unaffected by the …
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
We suspect most of the recent weakness in housing demand and prices is due to the temporary influence of the rise in stamp duty on 1st April rather than any longer-lasting influence from the softer outlook for the UK economy. This supports our view that a …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. The ECB’s forthcoming assessment of its 2021 strategy review won’t …
28th May 2025
Debate around whether or not India’s economy has surpassed Japan’s in size is raging, but the big picture is that India was always going to overtake Japan – and also Germany – given its positive demographics and scope for continued productivity gains. So …
The pandemic is firmly in our collective rear-view mirrors, but five years on, its effects continue to drive real estate performance differentials. We expect it to remain integral to driving winners and losers over the next five years and into the 2030s. …
For most of the time since the euro was established, the ECB’s “one size fits all” interest rate policy was a major problem for the single currency area. It contributed to imbalances between countries in the 2000s and to a prolonged downturn in peripheral …
27th May 2025
Easing cycle to remain on pause, but tariff risks grow larger The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, and we think it is likely that above-target inflation will prevent interest rate cuts being delivered this …
Regional growth resilient (for now) despite tariffs The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that pockets of the region are starting to feel the bite from US tariffs, but that overall regional …
Economy weak, inflation expectations eased May’s euro-zone business and consumer survey from the European Commission shows a small improvement in sentiment, but the data are still consistent with the economy struggling. And the price expectations indices …
Russia’s invasion of Ukraine caused grain prices to surge to record levels in 2022, but a peace deal won’t lead to large falls in prices. This is mainly because Ukrainian grain production has already largely recovered from the war-related disruption. …
The well-known quality issues with the UK’s labour market data might well extend to some of the other UK economic data. This matters as it could have a critical bearing on policy decisions and lead to economic growth and inflation that is either too high …
European residential property outperformed all-property for the third consecutive year in 2024 and our updated forecasts suggest that this will continue over the coming five years. Returns were especially strong in the Netherlands, but going forward we …
BoI leaves rates on hold, timeline for easing slipping back The Bank of Israel (BoI) left its policy rate unchanged as expected at 4.50% again today, but the accompanying communications took a slightly more hawkish tone on inflation. We think the easing …
26th May 2025
Assessing the fallout after a busy election weekend Last Sunday was a busy day of voting in CEE and threw out some surprises. Pro-EU centrist Nicusor Dan won the second round of Romania’s presidential election, even though he’d lagged in the polls. …
23rd May 2025
ECB account reveals disagreement The account of last month’s ECB meeting, published on Thursday, showed diverging views on the risks to inflation and the appropriate monetary policy stance. It noted that “a few” members of the Governing Council “could …
US-EU brinkmanship highlights risks President Trump’s threat of a 50% tariff from 1 st June may well turn out to be a negotiating tactic and seems very unlikely to be where tariffs settle over the long run. But if it were implemented it could result in a …
The headline news this week was the bigger-than-expected leap in CPI inflation from 2.6% in March to 3.5% in April. (See here .) It would be easy to conclude that most of the increase was due to one-off price rises that will stay in the inflation rate for …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Germany’s historic shift to looser fiscal policy will give the …
This page has been updated with additional analysis since first publication. The sun won’t shine on the retail sector forever Although for the first time since 2015, excluding the pandemic, retail sales volumes have risen for four months in a row, April’s …
Israel readying strikes on Iran’s nuclear facilities? Rumours that Israel could strike Iran’s nuclear facilities suggest that conflict in the region could escalate. But there are reasons to think that the fallout for the oil market, and therefore the Gulf …
22nd May 2025
Our View: The economies of Central and Eastern Europe have lost momentum over the course of 2025 and, while the region is relatively insulated from US tariffs, the risks to our growth forecasts have generally shifted lower this month. Some central banks …
We have just returned from three days of client meetings in Europe where the biggest topics of interest were US tariffs, Germany’s fiscal stimulus, risks to public finances (including in France) and our recent work on the future of Europe . This Update …
Small boost from tariff front-running not enough to stop economy stalling This page has been updated with additional analysis since first publication. The euro-zone’s flash PMIs for May suggest that manufacturing output continues to be supported by the …
This page has been updated with additional analysis since first publication. Weak economy helping to reduce upside inflation risks Despite the modest rebound in the composite activity PMI in May, at face value it is consistent with the bumper 0.7% q/q …
Europe Commercial Property Chart Pack (Q2 2025) …
This page has been updated with additional analysis since first publication. Disappointing borrowing figures highlight Chancellor’s lack of wiggle room April’s public finances figures showed that despite the boost from the rise in employers’ National …
This page has been updated with additional analysis since first publication. More than one-off rises The bigger-than-expected jump in CPI inflation in April suggests that the persistence of inflation is a bit stronger and/or businesses are passing on more …
21st May 2025
Overview – UK commercial property is relatively well insulated from the direct impact of US tariffs, and some sectors may even see small benefits. Rental growth has also held up better than expected. But with increased uncertainty weighing on economic …
20th May 2025
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. The push to enlarge the EU has gained momentum since the start …
German office rents made stronger than expected gains in 2025 Q1. But not all markets were moving in line, with Frankfurt’s buoyancy a stark contrast to other cities. While that suggests risks remain on the upside in the near term, we still expect overall …
By seeking to extend the “polluter pays” principle to building owners and road users, the ‘sequel’ to the EU’s Emissions Trading Scheme was always likely to run into public and political opposition. The risk for the EU is that any concessions to make ETS2 …
19th May 2025
April’s surprisingly large jump in services inflation appears to have been entirely an Easter timing effect that will reverse in May. Meanwhile, there are some near-term upside risks to headline inflation from higher food prices, but we still expect the …
The unexpected victory for centrist candidate, Nicusor Dan, in the second round of Romania’s presidential election on Sunday marks a major comeback against the far-right, and will ease concerns about the country veering from its pro-EU stance. That said, …
Sharp contraction at the start of the year The sharp slowdown in Russian GDP growth from 4.5% y/y in Q4 to 1.4% in Q1 is consistent with a sharp fall in output and suggests that the economy may be heading for a much harder landing than we had expected. …
16th May 2025
The agreement to roll back some tariffs reached by the US with both China and the UK raises the question of whether the EU will reach a similar deal before 9 th July, when the pause on the so-called “reciprocal” tariffs expires. We suspect a US-EU deal …
The implications of the government’s latest policies for the economy bring to mind the quote “what the right hand giveth, the left hand taketh away”. The right hand – EU reset In the right hand is the UK-EU reset, which will begin on Monday to much pomp …
Risks now skewed towards hikes rather than further cuts The National Bank of Romania (NBR) highlighted concerns with the uncertain political backdrop and recent pressure on the currency when leaving its policy rate on hold today, at 6.50%. We now think …
The polls ahead of presidential elections in Romania and Poland this Sunday point to diverging political paths for the two largest economies in Central and Eastern Europe over the coming years. We’ll be discussing the implications of Sunday’s election …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. European markets have had a strong start to the year, and we are …
15th May 2025
Europe Commercial Property Valuation Monitor (Q2 2025) …
