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This page has been updated with additional analysis since first publication. Sizeable fall in July marks beginning of downward trend Euro-zone industrial production fell in July and we think it will continue to do so over the remainder of the year in the …
13th September 2023
Core inflation edges down but Norges Bank to raise rates next week Norway’s inflation rate came in broadly in line with the Norges Bank’s expectations in August, suggesting that policymakers will go ahead with their plan to raise rates from 4.0% to 4.25% …
11th September 2023
Stagnant in Q2, likely to contract in Q3 The downward revision to the euro-zone’s second-quarter GDP data means the economy is now thought to have essentially flat-lined since the fourth quarter of last year. With business surveys having turned down …
7th September 2023
Fall in German industrial production even worse than it looks Aggregate German industrial output fell sharply again in July and the fall was even larger if the construction and energy sectors are excluded. We expect production to drop further in the rest …
This page has been updated with additional analysis since first publication. Edge down points to period of weakness Euro-zone retail sales fell in July and, in our view, will keep declining over the rest of the year as the effects of tighter monetary …
6th September 2023
Final PMIs underline that outlook has deteriorated The final PMIs published today were revised down from the already-low levels reported in the flash measure two weeks ago. The Services Business Activity PMI slumped compared to July, and although the …
5th September 2023
Swiss economy set to continue flatlining Weak manufacturing and investment weighed on the Swiss economy in Q2, leaving GDP unchanged from the previous quarter. We think activity will be sluggish for the rest of the year as the effects of monetary …
4th September 2023
This publication has been updated with additional analysis. Inflation unchanged, set to stay below 2% Switzerland’s headline inflation rate was unchanged in August as a fall in core inflation was offset by the impact of rising fuel prices. This is the …
1st September 2023
This page has been updated with additional analysis since first publication. September rate decision hangs in the balance The small upside surprise to euro-zone headline inflation in August was entirely due to energy, while the core rate edged down. We …
31st August 2023
Inflation still stubbornly high August’s slightly higher-than-expected inflation rates in Germany and Spain mean euro-zone HICP inflation may not fall as far as we had anticipated (data due tomorrow) and marginally raise the chance of another rate hike in …
30th August 2023
This page has been updated with additional analysis since first publication. Euro-zone sentiment weakens further The decline in the euro-zone’s Economic Sentiment Indicator (ESI) in August leaves it consistent on past form with GDP stagnating at best in …
This page has been updated with additional analysis since first publication. German economy set to contract again in third quarter The fourth successive monthly decline in the Ifo Business Climate Index in August, following the slump in the PMIs earlier …
25th August 2023
This page has been updated with additional analysis since first publication. Germany leading euro-zone into recession August’s flash PMIs were worse than expected, particularly in Germany, and are consistent with our view that the euro-zone economy will …
23rd August 2023
Only one more Norges Bank hike to come Norges Bank is very close to the end of its tightening cycle. After today’s 25bp hike, taking the deposit rate to 4%, we expect one final 25bp increase in September. We have then pencilled in a faster pace of rate …
17th August 2023
This page has been updated with additional analysis since it was first published. Weak manufacturing to continue to weigh on economic growth Despite euro-zone industrial production having increased in June on a monthly basis, it remained well below its Q1 …
16th August 2023
Unchanged inflation points September rate hike The unchanged readings for both headline inflation and the Riksbank’s target variable suggest that a further interest rate hike in September is highly likely. Headline inflation came in at 9.3% in July, …
15th August 2023
Decline in inflation in line with central bank’s expectations July’s decline in inflation in Norway was broadly in line with the central bank’s forecast. So Norges Bank is likely to go ahead with its planned 25bp rate hike next week. The decline in …
10th August 2023
Slump in June and more weakness to come German industrial output fell in June and we expect it to decline further in the rest of this year as high interest rates and weakening demand take a toll on production. The 1.5% m/m fall in industrial production …
7th August 2023
Renewed drop and more weakness ahead Euro-zone retail sales fell in June and we expect them to continue to trend down over the rest of this year as high interest rates take an increasing toll on consumers. The 0.3% m/m drop in retail sales in June was …
4th August 2023
Recession likely in H2 The final euro-zone PMIs confirmed that economic conditions deteriorated in July, with the Composite index consistent with GDP declining slightly. We continue to expect the euro-zone economy to fall into recession in the second half …
3rd August 2023
This page has been updated with charts since first publication. Inflation declines further below 2% Easing core inflation drove headline inflation lower in July, but we don’t expect it to fall much further this year. Despite inflation now sitting within …
This page has been updated with additional analysis since first publication. Tight labour market will only loosen gradually The euro-zone labour market remains extremely tight, with the unemployment rate steady at a record low in June. We expect weakness …
1st August 2023
This page has been updated with charts since first publication. Services inflation rises again, recession still likely July’s inflation data will have been a disappointment for policymakers as, although headline inflation fell in line with expectations, …
31st July 2023
Italy from leader to laggard The drop in GDP in Italy in Q2 means euro-zone output probably rose by 0.3% q/q in Q2, and just 0.1% if Ireland is excluded. Italy is no longer outperforming its peers and we think it will experience a sharper drop in output …
This page has been updated with additional analysis since first publication. Business surveys point to stagnation The small fall in the EC Economic Sentiment Indicator (ESI) in July leaves it consistent on past form with output stagnating and suggests …
28th July 2023
Germany still the weak link National data released so far suggest that the euro-zone economy held up better than we had anticipated in Q2, with Germany still the laggard among major economies. We continue to think that monetary tightening will take an …
Strong economic growth in France and Spain The big increases in Q2 GDP in Spain and particularly France suggest that the euro-zone has so far coped with policy tightening much better than feared. However, the France data were flattered by temporary …
ECB hikes and leaves options open As was universally expected, the ECB raised interest rates by a further 25bp today and indicated that further hikes are possible but not certain. At the press conference we expect the main message to be that policy will …
27th July 2023
This page has been updated with additional analysis since first publication. Germany still in recession at start of Q3 The bigger-than-expected fall in the German Ifo, together with the drop in the PMIs published yesterday, suggest that the German economy …
25th July 2023
This page has been updated with additional analysis since first publication. Economy still in recession July’s euro-zone PMIs are consistent with our non-consensus view that the currency union’s economy will remain in recession. But they also suggest …
24th July 2023
Another election likely after inconclusive poll The People’s Party (PP) won the most seats at yesterday’s general election but, even together with the far-right VOX, they achieved only 169 seats which leaves them seven short of a majority. And given that …
Inflation falling, but still too high for the Riksbank The fall in CPIF inflation, the Riksbank’s target variable, in June was smaller than policymakers expected, which will encourage them to raise the policy rate from 3.75% to 4.00% at the next meeting …
14th July 2023
This page has been updated with additional analysis since first publication. Uptick in May but weakness ahead Euro-zone industrial production edged up in May but it probably still declined over Q2 as a whole and we think further weakness is ahead. The …
13th July 2023
This page has been updated with additional analysis since first publication. Core inflation again stronger than expected In June, Norway’s inflation data were much stronger than expected for the second month running. While the Norges Bank has signalled a …
10th July 2023
Renewed fall in May and outlook is bleak German industrial production fell in May and is likely to have declined in Q2. We think industry will continue to struggle over the rest of this year. The 0.2% m/m fall in industrial production in May was worse …
7th July 2023
Retail sales flat in May Euro-zone retail sales remained very weak in May and point to household consumption having fallen in Q2. Further out, low consumer confidence and rising interest rates suggest that household consumption will fall further over the …
6th July 2023
Economy weakened at the end of Q2 The downward revision to the euro-zone Composite PMI for June, from 50.3 to 49.9, left it consistent with the economy stagnating at best at the end of Q2. Given that the PMI overstated growth in Q1, and that other data …
5th July 2023
This page has been updated with additional analysis since first publication . Inflation below 2% won’t stop the SNB hiking The fall in inflation in June was smaller than the SNB had expected and SNB Chairman Thomas Jordan’s comments after the meeting two …
3rd July 2023
This page has been updated with additional analysis since first publication. Euro-zone HICP (June) Strength of core inflation means ECB will keep hiking June’s inflation data won’t shift the dial at the ECB. While the headline rate is on a steep downward …
30th June 2023
June inflation figures will keep ECB hawkish The increase in German headline and core inflation in June was mainly due to base effects. Euro-zone headline inflation probably still fell but the core rate is likely to have been little changed which will be …
29th June 2023
Sentiment weakens and points to stagnation The EC Economic Sentiment Indicator (ESI) weakened further in June and is broadly consistent with the economy stagnating at best. We expect the euro-zone’s mild recession to continue for the rest of the year as …
Riksbank likely to hike more than it expects The 25bp rate hike announced by the Riksbank today, which brings the key policy rate to 3.75%, had been strongly signalled at the Riksbank’s last meeting. But the accompanying statement and decisions to …
Inflation back under 2% The further fall in Spanish HICP inflation will provide some respite for households who have suffered a sharp hit to real household income over the last year. But it will have little sway over ECB decision-making as …
Improvement in core inflation not enough to appease ECB The drop in Italy’s headline and core inflation in June is encouraging. But the euro-zone core rate is unlikely to have declined significantly due to base effects related to the anniversary of the …
28th June 2023
This page has been updated with additional analysis since first publication. More bad news on the German economy The slump in the German Ifo, together with the drop in the PMIs, released on Friday, suggests that German GDP probably contracted for the …
26th June 2023
The fall in the euro-zone flash Composite PMI from 52.8 in May to 50.3 in June left it even lower than our below-consensus forecast. On the face of it, the index still points to a small expansion in Q2, but it hasn’t been a good leading indicator …
23rd June 2023
Norges Bank steps up the pace of rate hikes, more to come Today’s 50bp rate hike by the Norges Bank, taking its policy rate to 3.75%, won’t be the end of its tightening cycle. We already expected the policy rate to hit 4%, above the consensus forecast, …
22nd June 2023
SNB hikes by 25bp and signals more to come The 25bp rate hike announced by the SNB this morning was in line with market expectations but less than the 50bp we had predicted. However, the accompanying statement and upward revision to inflation forecasts …
ECB hikes and signals more to come The ECB raised interest rates by 25bp today, as expected, and the press release implies that we can expect at least one further hike in July. We might get a bit more colour in the press conference, but whatever hints we …
15th June 2023
Inflation coming down but Riksbank to hike by 25bp Headline inflation declined as expected in May but the underlying measure fell a bit less than anticipated and points to upside risks to our forecast that the Riksbank will raise interest rates just once …
14th June 2023