Europe Economic Outlook Inflation falling but rates may rise to zero We expect consumption to rebound from the Omicron wave within a few weeks, lifting euro-zone GDP to its pre-pandemic level in the first half of the year. But GDP will remain below its pre-pandemic... 21st January 2022 · 30 mins read
Europe Data Response German Inflation (December) Final inflation data for December showed that the decline in Germany’s HICP inflation rate to 5.7% was due to energy and services. We expect both headline and core inflation to fall this year, but... 19th January 2022 · 2 mins read
Europe Commercial Property Update ECB rate hike unlikely to move the needle for property While we now expect the ECB to start its tightening cycle earlier, we don’t think the change is significant enough to prevent further property yield compression over 2022-23, albeit at a slower pace... 18th January 2022 · 3 mins read
Europe Data Response German GDP (2021) Provisional data showing that Germany’s GDP increased by 2.7% last year and news that it shrank in Q4 underlines that its recovery has lagged many of its peers, including the US, France and the UK. We... 14th January 2022 · 3 mins read
Europe Data Response German Industrial Production (November) The unexpected decline in German industrial production in November increases the chance that GDP fell in the last quarter of 2021. And with the Omicron variant likely to hit Germany hard in the coming... 7th January 2022 · 2 mins read
Europe Data Response Germany Flash Inflation (December) Germany’s HICP inflation rate fell to 5.7% in December and is now past its peak, but the national CPI measure, which is arguably a better indicator at the moment, rose slightly. Looking ahead, we... 6th January 2022 · 3 mins read
Europe Economics Weekly ECB slightly more hawkish than expected Following a the ECB’s slightly hawkish policy shift this week, we have penciled in a rate hike for 2024 and think the chance of a 2023 lift-off has risen. The big picture, though, is that the ECB will... 17th December 2021 · 11 mins read
Europe Data Response German Ifo Survey (December) The fall in the Ifo BCI for December underlines that German’s economy has been hit hard by the latest Covid wave even before the Omicron variant has taken hold. The only consolation is that... 17th December 2021 · 2 mins read
Europe Economics Weekly Omicron uncertainty weighs on activity in Q4 This week brought more bad news for the euro-zone economy, with the surge in cases and spread of the Omicron variant casting a shadow over services sector activity. While recent restrictions have... 10th December 2021 · 8 mins read
Europe Commercial Property Outlook Omicron poses near-term downside risk to property recovery The near-term economic outlook has weakened, with the Omicron variant posing further downside risk. Meanwhile, inflation is likely to be higher for longer. However, we expect it to fall back by 2023... 9th December 2021 · 30 mins read
Europe Data Response German Industrial Production (October) The rebound in auto output in October means that aggregate industrial production may increase in the fourth quarter. But with the services sector being hit hard by new Covid restrictions, it seems... 7th December 2021 · 2 mins read
Europe Data Response Germany Flash Inflation (Nov.) The increase in German inflation to 6% on the HICP measure was partly due to statistical quirks which should be reversed next month. But even the national CPI measure of inflation rose to 5.2%... 29th November 2021 · 3 mins read
Europe Commercial Property Valuation Monitor Valuations worsen, but office and retail still fair value Higher alternative asset yields and falls in office and industrial yields contributed to a further deterioration in property valuations in Q3. The decline in government bond yields since then, which... 29th November 2021 · 7 mins read
Europe Economics Weekly Rising Covid fears will keep policymakers dovish It is too early to judge how serious the B.1.1.529 variant will turn out to be, but it certainly reinforces the case for central banks to be ultra-cautious when withdrawing their policy support. We... 26th November 2021 · 11 mins read
Europe Data Response German Ifo Survey (November) The fall in the Ifo Business Climate Index (BCI) for November was in line with expectations and suggests that the German economy was struggling even before the recent tightening of Covid restrictions... 24th November 2021 · 2 mins read
Europe Economics Update Q4 outlook darkens as tighter restrictions loom Germany’s worsening Covid situation means much of the country could be subject to much tighter restrictions soon, potentially knocking around 0.25%-pts off euro-zone Q4 GDP. Even if other countries... 23rd November 2021 · 3 mins read
