Europe Economics Focus Do negative ECB interest rates lead to higher saving? We disagree with recent suggestions that negative central bank policy rates encourage households to increase their savings, thereby reducing demand and weighing on inflation. In fact, the opposite... 1st June 2016 · 1 min read
UK Data Response Markit/CIPS Report on Manuf. (May) & Money and Credit (Apr.) The small improvement in the Markit/CIPS manufacturing survey in May did little to change the fundamental picture of a struggling industrial sector. But we remain optimistic that the sector’s... 1st June 2016 · 1 min read
US Economics Update Monetary Indicators Monitor (Apr.) The robust growth in bank loans and the monetary aggregates is another reason to believe that second-quarter GDP growth will rebound markedly. The growth rate of our M3 measure accelerated to 4.0% in... 31st May 2016 · 1 min read
Global Economics Update Monetary aggregates and credit continue to expand steadily For all the talk of a sharp slowdown in the global economy this year, broad money and credit have been growing at a steady pace. In advanced economies as a whole, credit has increased by around 5% y/y... 31st May 2016 · 1 min read
Europe Economics Update Euro-zone Monetary Indicators Monitor (Apr.) April’s euro-zone monetary data suggest that economic growth remains fairly slow. While the full effects of the ECB’s expanded stimulus measures will not yet have been felt, we doubt that they will... 31st May 2016 · 1 min read
India Economics Update Another look at the ailing banking sector The sharp rise in non-performing loans (NPLs) in Q1 does not indicate that there has been a sudden deterioration in asset quality in India, but instead suggests a greater recognition of stressed... 30th May 2016 · 1 min read
Asia Economics Weekly Usual suspects repeating the same old mistakes By keeping monetary policy too loose for too long, Pakistan, Vietnam and Sri Lanka now face either a surge in inflation or a rise in bad debts. What’s more, central banks remain complacent about the... 27th May 2016 · 1 min read
China Economics Update What is going on with the renminbi? In trade-weighted terms, the renminbi has regained some lost ground recently. But all the headlinesare about it falling to multi-year lows against the dollar. This underlines the difficult position... 25th May 2016 · 1 min read
Europe Economics Update Eurogroup’s Greek debt pledges fall a long way short The likely disbursement of the next tranche of Greece’s third bailout may have reduced the risk of a summer flare-up of the country’s debt crisis. But with the creditors’ pledges on debt relief... 25th May 2016 · 1 min read
Emerging Europe Economics Update Hungary ends easing cycle, Turkey’s has further to run Having cut its policy rate by 15bp to 0.90% earlier today, the National Bank of Hungary’s MPC used the accompanying press release to comment that interest rates would now be left unchanged. In... 24th May 2016 · 1 min read
UK Data Response Public Finances (Apr.) The disappointing tone of the latest public borrowing figures ended the recent short run of more upbeat economic data and indicated that the Chancellor has started the fiscal year on the back foot. 24th May 2016 · 1 min read
China Economics Update Can China afford to bail out its banks? China’s government has the resources to clean up the bad debts in its financial system. Even if the corporate sector were to default on a quarter of its debt and the government responded by bailing... 19th May 2016 · 1 min read
China Economics Update Capital Flows Monitor (Apr.) Foreigners continued to pull money out of China last month. But a further slowdown in the pace of external debt deleveraging helped to keep capital outflows manageable. 17th May 2016 · 1 min read
Europe Economics Update Mounting risks bode ill for Italy Like much of the rest of the euro-zone, Italy’s economy got off to a decent start to the year. However,the outlook for growth remains weak and the risks to the recovery are mounting. Eventually... 16th May 2016 · 1 min read
China Data Response Bank Lending & Broad Credit (Apr.) Many have rushed to interpret today’s below-consensus lending and credit data as signalling that a shift in policymakers’ focus back to controlling credit risks is already having an impact. While that... 13th May 2016 · 1 min read
Emerging Markets Economics Update EM credit bubbles deflating, but risks building in China Credit growth is slowing in most of the economies we have previously identified as being at risk from a rapid build-up of private sector debt. The exception is China, where aggressive stimulus has... 12th May 2016 · 1 min read
