UK Economics What if we’re wrong on inflation? This week’s data releases have made us more confident that the Bank of England will raise interest rates in December. But our forecast that inflation will fall back sharply in 2022 underpins our view... 19th November 2021 · 5 mins read
Europe Economics Weekly Austria lockdown casts shadow over rest of euro-zone The “full lockdown” in Austria announced earlier today is a response to the rapid deterioration in the Covid situation there and we estimate that it could knock around 1.5% off the country’s GDP in Q4... 19th November 2021 · 6 mins read
Nordic & Swiss Economics Weekly SNB abandons its long-standing line of defence We argued only last week that the SNB would be comfortable with letting the Swiss franc rise against the euro. As it happens, after the franc pushed through the long-defended CHF 1.05 per euro mark in... 19th November 2021 · 4 mins read
FX Markets Chart Pack US dollar bull market might just be getting started The dollar has risen to its strongest level in more than a year and, though it is not our central forecast, we think the risk of a more sustained dollar bull market is increasing. 19th November 2021 · 10 mins read
UK Housing Market Chart Pack Little sign of momentum in prices abating The end of the stamp duty holiday has had remarkably little impact on buyer demand. If anything, the imbalance between strong home purchase demand and limited supply is intensifying. Indeed, Rightmove... 19th November 2021 · 8 mins read
UK Economics Retail Sales (Oct.) The rebound in retail sales in October adds to the evidence that activity held up well in October and will raise expectations that the Bank of England will hike interest rates from 0.10% to 0.25% in... 19th November 2021 · 2 mins read
UK Economics Public Finances (Oct.) The winding down of the furlough scheme helped to bring down public sector net borrowing in October. But we doubt that the public finances will get much help from faster GDP growth in the near term. 19th November 2021 · 3 mins read
Commodities Focus Sky-high European steel prices on borrowed time After soaring towards the tail end of 2020, steel prices in Europe have eased back in recent months. And we think that prices will fall much further over the next couple of years, as a combination of... 18th November 2021 · 10 mins read
Europe Economics Update New Covid restrictions another headwind Several euro-zone governments have tightened coronavirus rules lately and more measures are on the cards, including in Germany. On the whole, these are set to be less severe than they were earlier... 18th November 2021 · 4 mins read
Emerging Europe Economics Update Lira sell-off and lessons from other “sudden stops” The fresh falls in the Turkish lira following the CBRT’s interest rate cut today have left Turkey firmly in crisis territory and echoes of previous “sudden stops” during major EM currency crises in... 18th November 2021 · 3 mins read
Emerging Markets Economics Update Turkey and EM contagion risks The latest crisis engulfing Turkey is likely to make it harder for the country to roll over its external debts, with the banking sector particularly vulnerable. If Turkey’s crisis worsens, it may... 18th November 2021 · 3 mins read
Nordic & Swiss Central Bank Watch An opportunity to dial down the dovishness a touch The Riksbank is all but certain to leave its policy settings on hold next week. But against a backdrop of above-target inflation and the broader hawkish shift by policymakers elsewhere, we expect it... 18th November 2021 · 5 mins read
Emerging Europe Economics Update CBRT defies investors with rate cut, crisis risks mount The sharp falls in the lira over the past few days clearly weren’t enough for Turkey’s central bank to stand up to President Erdogan as it pushed ahead with a 100bp cut (to 15.00%) to its one-week... 18th November 2021 · 3 mins read
Global Markets Update We now expect E-Z “peripheral” spreads to widen a bit We now think that, rather than remaining broadly stable, the spreads of euro-zone “peripheral” bonds will widen somewhat over the next two years as the ECB gradually normalises monetary policy. That... 17th November 2021 · 6 mins read
Emerging Europe Data Response Russia GDP (Q3 2021) The softer-than-expected 4.3% y/y expansion in Russia’s GDP in Q3 suggests that the recovery lost momentum during the summer and, with the severe virus outbreak likely to take its toll on domestic... 17th November 2021 · 2 mins read
Emerging Europe Economics Update All eyes on CBRT as Turkish lira continues to tumble There has been no let up for the Turkish lira today and all eyes are turning to the central bank’s interest rate decision tomorrow. Policymakers’ increased tolerance to falls in the lira as well as... 17th November 2021 · 4 mins read
