The outlook for the European economy remains relatively bright compared to the major downturn underway in the US. Nonetheless, divergences are widening between those economies subject to US-style consumer imbalances – including the UK, Spain and Ireland – and those like Germany where households have behaved in a more restrained fashion over recent years. Those strains look set to increase further as the credit crunch exacerbates the slowdown in some previously overheated property markets and lingering inflation concerns prevent the policymakers from loosening policy very aggressively.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services