Europe Economics Update Gas crisis heightens German recession risk Recent developments have further increased the chance that there is a complete end to Russian exports of gas to Germany. If this occurred, it would lead to a substantial fall in manufacturing output... 28th June 2022 · 3 mins read
Europe Economics Focus Euro-zone core inflation will remain higher for longer We are revising up our forecast for core inflation in the euro-zone because the labour market is tighter, demand stronger and inflation expectations higher than we had anticipated. Moreover, fiscal... 27th June 2022 · 14 mins read
Europe Economics Weekly US recession fears won’t deter ECB Fears about a possible US recession have prompted investors to revise their ECB interest rate expectations down this week, but we have pushed ours up to show the deposit rate peaking at 2%. While next... 24th June 2022 · 7 mins read
Europe Data Response German Ifo Survey (Jun.) The renewed decline in the German Ifo Business Climate Index for June provides further evidence that weaker demand is starting to affect manufacturing output. With inflation set to remain high and the... 24th June 2022 · 2 mins read
Europe Commercial Property Outlook Rising interest rates to speed up property correction The weaker economic outlook and larger increases in interest rates are expected to weigh on property performance. With valuations under increasing pressure from sharply rising bond yields, we think... 23rd June 2022 · 31 mins read
Europe Economics Update Loss of majority curtails Macron’s second term plans French President Emmanuel Macron faces five difficult years after losing his absolute majority in parliament. Proposed reforms, including to pensions and benefits, will be diluted if they happen at... 20th June 2022 · 3 mins read
Europe Economics Update New ECB instrument, same old problems The best way for the ECB to contain peripheral bond spreads would be via a new programme of unlimited, flexible bond purchases. This may be what happens eventually, but we suspect it will take longer... 17th June 2022 · 4 mins read
Europe Economics Weekly ECB has done the easy bit, harder work is to come This week, the ECB arrested the sell-off in peripheral bond markets without announcing very much at all, but there’s only so long that markets will be soothed by encouraging words about a possible... 17th June 2022 · 7 mins read
Europe Economics Update Consumption to increase despite low confidence Despite consumer confidence remaining extremely low, we now think household spending in the euro-zone will edge up in Q2. Excess savings and a tight labour market have helped to cushion the blow from... 17th June 2022 · 3 mins read
Europe Data Response Euro-zone Final HICP (May) Final inflation data for May confirm that the headline and core rates both rose to record highs. The recent increases in gas and agricultural commodity prices will keep the headline rate higher than... 17th June 2022 · 2 mins read
Energy Update Europe’s gas supply looking increasingly fragile Russia’s decision to once again cut supplies to Europe makes the region’s gas supply look increasingly precarious. The move will slow regional stock builds and keep prices historically high. 16th June 2022 · 2 mins read
Europe Economics Update Demand for labour to remain strong in the euro-zone Strong demand for labour, not a lack of potential workers, has driven the euro-zone’s unemployment rate to a record low. Employment gains have been biggest in public services and we expect demand for... 16th June 2022 · 4 mins read
Europe Data Response EZ Hourly Labour Costs (Q1) The acceleration in euro-zone wage growth at the start of the year is consistent with the timelier data already published and the message from pay negotiations. Against a backdrop of high inflation... 16th June 2022 · 2 mins read
Europe Economics Update Pressure is on for ECB spread-fighting tool in July The ECB’s press release following its unscheduled meeting fell short of announcing a fleshed out spread-fighting tool that could provide a permanent solution to the problem. Flexible PEPP... 15th June 2022 · 3 mins read
Europe Data Response Euro-zone Industrial Production (Apr.) The increase in industrial output in April only partially reversed the decline in March and shows that the economic fallout from the Ukraine war is still holding back production. With survey data... 15th June 2022 · 2 mins read
Europe Economics Update ECB emergency meeting (June 2022) News that the ECB Governing Council is holding an emergency meeting today shows that policymakers are taking the threat of rising peripheral yields more seriously than they were last Thursday at their... 15th June 2022 · 3 mins read
