Europe Economics Weekly ECB only partly rows back from hawkish shift Sifting through the numerous statements by ECB policymakers this week leaves us still thinking that the ECB is likely to “recalibrate” its plans in March and pave the way for an end to QE and a first... 11th February 2022 · 6 mins read
Europe Commercial Property Update Global property returns not expected to defy gravity The exceptionally strong rebound in commercial property returns has been clear from the middle of last year. While this came earlier than most expected, we think it reflected special conditions and... 11th February 2022 · 3 mins read
Europe Data Response German Inflation (January) The upside surprise to Germany’s headline inflation rate in January was mostly due to higher energy prices rather than rising underlying inflation. Nonetheless, core inflation of 2.9% is well above... 11th February 2022 · 2 mins read
Nordic & Swiss Data Response Switzerland CPI (Jan.) Inflation was stronger than expected in Switzerland in January, although the upward surprise was not in the same league as that seen in the euro-zone and Swiss inflation is still consistent with the... 11th February 2022 · 2 mins read
UK Housing Market Update Rental growth on the launchpad We already expected that rental growth would surge to a decade-high this year. But the strength of leading indicators and the low level of rents relative to income by historical standards suggest... 11th February 2022 · 3 mins read
UK Economics GDP (Dec. & Q4) When combined with the CPI inflation rate of 5.4%, the 0.2% m/m fall in GDP in December meant that the economy experienced a taste of stagflation at the end of last year. As it was driven by the... 11th February 2022 · 4 mins read
Europe Economics Update Lessons from Europe’s past wage-price spirals While there are limits to the lessons we can draw from the past, Europe’s experiences since World War Two provide some guidance as to the outlook for wages and inflation. They suggest that the recent... 10th February 2022 · 4 mins read
UK Economics Household incomes taking a big hit We estimate that the leap in utility prices and hike in taxes on 1 st April will reduce real household disposable incomes over the next two years by a cumulative £80bn. The resulting 2.0% decline in... 10th February 2022 · 8 mins read
Nordic & Swiss Economics Update Riksbank unlikely to buck the trend for much longer While the Riksbank largely stuck to its dovish stance this morning, the fact that three of the six members of the Executive Board entered reservations and favoured reducing the size of the balance... 10th February 2022 · 3 mins read
Nordic & Swiss Data Response Norway Consumer Prices (Jan.) Given the backdrop of a tightening labour market, the fall in CPI-ATE is likely to be a one-off. We think that once the latest wave dissipates, the core inflation rate will pick up again and may rise... 10th February 2022 · 2 mins read
Emerging Europe Data Response Russia Activity Data (Dec.) & Consumer Prices (Jan.) The latest data show that Russia’s economy grew strongly in December and that consumer price inflation rose to 8.7% y/y in January. The inflation reading was weaker than expected, but inflation looks... 9th February 2022 · 2 mins read
UK Economics Interest rates to peak at 2.0% We now think that Bank Rate will rise from 0.50% currently to 1.25% sooner than we previously thought. What’s more, we now expect three more 25 basis point rate rises in 2023, resulting in rates... 9th February 2022 · 7 mins read
Europe Economics Update Will ECB tightening cause a fresh crisis? Any policy tightening by the ECB in 2022-23 will probably be too limited to cause major problems in the bond market. But if interest rates rise much further than we anticipate, that could trigger... 9th February 2022 · 4 mins read
UK Commercial Property Valuation Monitor Valuations worsen as property yields continue to fall Property valuations, compared to bonds and equities, deteriorated for a fourth consecutive quarter in Q4. The spread between the asset classes narrowed as the magnitude of the fall in all-property... 9th February 2022 · 6 mins read
Europe Economics Update How big a problem are higher interest rates for Italy? Our base case is that monetary tightening by the ECB results in a manageable rise in Italy’s government bond yields. We think it would take 10-year yields rising to 5% or more to bring debt... 9th February 2022 · 4 mins read
Emerging Europe Economics Update NBR steps up the pace of tightening The National Bank of Romania (NBR) accelerated its tightening cycle today with a 50bp hike to its key policy rate (to 2.50%) and, with inflation firmly above the central bank’s target, we think this... 9th February 2022 · 2 mins read
