Europe Economics Weekly The final countdown The failure of Greece and its creditors to reach a deal at last week’s many meetings has left very little time before the current bailout expires on Tuesday. Saturday’s Eurogroup meeting looks pretty... 26th June 2015 · 1 min read
India Economics Update Capital injections too small to revive banking sector The government’s plans to inject more capital into local banks are a positive step, but they are too limited to revive the ailing sector. Larger capital injections are needed to strengthen banks’... 26th June 2015 · 1 min read
UK Markets Outlook Markets right to expect slow monetary tightening The prevailing view in the markets that the MPC can raise interest rates extremely gradually over the coming years seems right to us. Granted, wage growth has begun to pick up and the Fed looks set to... 25th June 2015 · 1 min read
Middle East & North Africa Economics Update A primer on how Saudi Arabia uses its FX reserves There seems to be a lot of confusion as to exactly how Saudi Arabia is using its foreign exchange reservesto finance twin budget and current account deficits. In this Update, we shed some light on the... 25th June 2015 · 1 min read
China Economics Update Scrapping the loan-to-deposit ratio won’t boost bank lending A new proposal to do away with the loan-to-deposit ratio won’t relax the primary constraints on bank lending. It should, however, mean that a greater share of lending is directed towards smaller and... 24th June 2015 · 1 min read
Europe Economics Update Without major debt relief, a Greek deal won’t end crisis While a deal between Greece and its creditors may finally emerge in the next few days, it still looks unlikely to include the substantial debt relief needed to end the crisis and eliminate the risk of... 24th June 2015 · 1 min read
Europe Economics Update Grexit might be unavoidable, but it need not be a crisis In 2012, Capital Economics won the Wolfson Prize for our submission on how the exit from the eurozone of a small country like Greece might best be managed. Given the still significant risk that... 23rd June 2015 · 1 min read
US Economics Update Monetary Indicators Monitor (May) The annual growth rates of broad money and bank loans slowed a little in May, but that is mainly due to base effects. Furthermore, our reconstructed measure of M3 still increased by a relatively... 23rd June 2015 · 1 min read
UK Economics Update UK faces bigger external threats than a China slowdown The UK has become significantly more exposed in recent years to the Chinese economy, which has made a poor start to 2015. But this shouldn’t cause the UK economy too many problems – Greece remains by... 23rd June 2015 · 1 min read
Europe Economics Update Capital controls likely, but they can’t prevent Grexit Accelerating deposit outflows from Greek banks and the ECB’s reluctance to fill the gap with further emergency loans have increased the likelihood that capital controls are imminent. We discuss the... 19th June 2015 · 1 min read
Global Economics Update Reviewing the lessons from past devaluations Devaluations have generally had a more positive impact on growth in economies which have a lot of spare capacity, where monetary conditions have been excessively tight and where a debt write-off is... 18th June 2015 · 1 min read
Europe Economics Update Another scary peek at Greece’s debt dynamics A look at Greece’s debt outlook using plausible economic assumptions underlines the inevitability of a substantial form of default, inside or outside the euro-zone. 18th June 2015 · 1 min read
UK Economics Update Pension reforms giving small boost to spending The Chancellor’s announcement regarding the amount of money withdrawn from pensions since the new freedoms took effect in April supports our view that the changes will provide a boost, but a... 18th June 2015 · 1 min read
Europe Economics Update SNB has more work to do in its fight against the franc The Swiss National Bank’s decision to leave its deposit rate at -0.75% presumably reflected the franc’s stabilisation at a slightly lower level. But we expect renewed upward pressure on the currency... 18th June 2015 · 1 min read
China Chart Pack Debt swap helping to boost credit growth The local government debt swap is starting to have an impact on the flow of financing in China that has been widely overlooked and that should support the economy. Local governments have begun to... 18th June 2015 · 1 min read
Europe Economics Update Is Cyprus a blueprint for Greece? Cyprus’ recent return to economic growth and its fairly swift liberalisation of capital controls might indicate that Greece could resolve its problems without leaving the euro-zone. However, there are... 16th June 2015 · 1 min read
