Europe Economics Weekly ECB boxes with shadows In adopting a more hawkish tone last week, when core euro-zone inflation is running at just 1.1%, the ECB has increased doubts over its ability to grasp the seriousness of the situation facing the... 17th January 2011 · 1 min read
UK Economics Weekly UK not alone in seeing inflation fears rise Last week’s decision by the Monetary Policy Committee (MPC) to leave interest rates on hold again will have done nothing to ease concerns that the Committee is allowing a serious inflation problem to... 17th January 2011 · 1 min read
US Data Response CPI, Retail Sales & Industrial Production (Dec.) December's retail sales and consumer price reports together suggest that real consumption growth accelerated to 3.8% annualised in the fourth quarter, from 2.4% in the third. If our calculations are... 14th January 2011 · 1 min read
Emerging Europe Economics Update How far will interest rates rise in Poland? After remaining on hold for the past 18 months, it seems all but certain that Polish interest rates will be hiked later this month. But we doubt that this will mark the start of an aggressive... 14th January 2011 · 1 min read
China Economics Update Reserve requirements set to become primary policy tool The People’s Bank is shifting towards using reserve requirements as a primary tool to limit credit growth. This is another reason to believe that interest rates will not rise as far as many expect in... 14th January 2011 · 1 min read
Latin America Economics Update Chilean rates on hold, but further hikes are likely Last night, the Central Bank of Chile (CBC) held interest rates at 3.25% but highlighted the need for further monetary tightening. Accordingly, we are sticking to our below-consensus forecast for... 14th January 2011 · 1 min read
UK Data Response UK Producer Prices (Dec.) December’s producer prices figures revealed that cost pressures in the manufacturing sector are continuing to intensify. But this should not prevent consumer price inflation from falling back in the... 14th January 2011 · 1 min read
Europe Data Response Euro-zone CPI (Final, Dec.) & Trade (Nov.) December’s final euro-zone CPI inflation figures should calm fears that underlying inflation pressures are building. But with headline CPI inflation likely to rise in early 2011, the ECB’s stance... 14th January 2011 · 1 min read
Bank of Canada Watch Rising financial risks spell trouble The Bank of Canada is widely expected to hold the key policy interest rate at 1% on Tuesday. More importantly, we expect it to hold the policy rate at 1% throughout this year. This is in contrast to... 14th January 2011 · 1 min read
Latin America Economics Update Tighter fiscal policy is still the key for Brazil Contrary to claims by some commentators, we think that tighter fiscal policy has a key role to play in ensuring that Brazil meets its current inflation/inflows challenge. Indeed, we would go as far to... 14th January 2011 · 1 min read
Europe Economics Update ECB remains reluctant to do more After leaving interest rates on hold, the ECB provided no indication that it is about to respond to the ongoing euro-zone fiscal crisis by adopting bolder unconventional policy measures. 13th January 2011 · 1 min read
Canada Data Response International Merchandise Trade (Nov.) November trade data show that net exports jumped in Q4, due to stronger commodity-related exports and also surprisingly weaker imports. Barring a collapse in December exports, we estimate that net... 13th January 2011 · 1 min read
US Data Response International Trade (Nov.) & PPI (Dec.) November's trade figures support our view that annualised GDP growth in the fourth quarter of last year was at least 4%, better than the consensus forecast of just over 3%. Meanwhile, December's... 13th January 2011 · 1 min read
UK Economics Update MPC not panicking yet The Monetary Policy Committee is coming under fire for leaving policy unchanged – as it did again today – in the face of rising near-term price pressures. But we doubt that the Committee has much to... 13th January 2011 · 1 min read
Asia Economics Update The Bank of Korea still has more work to do The Bank of Korea (BoK) lifted its policy rate by 25bp to 2.75% today, which was in line with our forecast but surprised the consensus. Policymakers have rightly become more focused on inflation and... 13th January 2011 · 1 min read
