Europe Economics Update Costa resignation won’t reverse Portugal debt progress The end of Portuguese Prime Minister António Costa’s time in office does not signify the end of Portugal’s impressive period of debt reduction. We think any future government is likely to exercise... 20th December 2023 · 4 mins read
Europe Economics Update Domestic price pressures are strong but easing Last week, Christine Lagarde cited high wage growth and “domestic inflation” as reasons for the ECB to keep interest rates high. While domestic price pressures are easing, it will take several months... 19th December 2023 · 4 mins read
Europe Economics Update ECB holding the line for now The ECB left interest rates on hold today and pushed back against expectations that it will start cutting rates as soon as March next year. However, we think inflation and GDP growth will be lower... 14th December 2023 · 3 mins read
Europe Economics Update Norges Bank tightening cycle comes to an end Today’s decision by Norges Bank to hike its policy rate by 25bp to 4.50% marks the end of its tightening cycle. Looking ahead, we have pencilled in a faster pace of rate cuts next year than... 14th December 2023 · 3 mins read
Europe Economics Update Dovish hold by SNB, policy loosening imminent Today’s SNB decision and statement were largely in line with expectations as the policy rate was held at 1.75% and policymakers removed any mention of FX sales. We think the latter decision signals... 14th December 2023 · 3 mins read
Europe Economics Update Tide turns towards rate cuts in Switzerland SNB Chairman Thomas Jordan recently reiterated the Bank’s line that “we will not hesitate to tighten monetary policy further if necessary” but the actual question is whether policymakers will hesitate... 7th December 2023 · 5 mins read
Europe Economics Update One last hike to come at Norges Bank Despite the recent paring back of interest rate expectations across Europe, we think Norges Bank is likely to go ahead with one final 25bp hike next week – taking the policy rate to a peak of 4.50% –... 7th December 2023 · 4 mins read
FX Markets Update Swedish krona’s decade-long fall may be ending Our view about relative economic and interest rate prospects in Sweden and the euro-zone suggests that the Swedish krona’s recent rebound may prove durable. In fact, given how far below “fair value”... 4th December 2023 · 3 mins read
Europe Economics Update Greek debt ratio will keep falling While there have been growing concerns about public finances in some euro-zone countries recently, prospects for Greece’s debt are quite bright. Steady economic growth, large primary surpluses and low... 4th December 2023 · 4 mins read
Global Economics Update Key risks for 2024 In this Global Economics Update, we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary... 30th November 2023 · 6 mins read
Europe Economics Update Riksbank likely to cut rates in Q2 next year Despite the Riksbank Executive Board insisting that it might raise interest rates again in the coming months, we would be very surprised if it does so. Instead, we think the next move will be a rate... 23rd November 2023 · 3 mins read
Global Markets Update Fiscal health and the outlook for the euro-zone’s bond markets We continue to forecast a small fall in euro-zone yield spreads over Bunds in the next year or so. However, rising risks to the upside in recent months and differences in fiscal positions between... 22nd November 2023 · 5 mins read
Europe Economics Update How worrying are France’s public finances? The EU’s criticism of French fiscal policy is not in itself a major concern. But France’s debt-to-GDP ratio may well rise over time rather than declining as the government intends. The key problem is... 21st November 2023 · 5 mins read
Europe Economics Update Norges Bank hike back on amid strong price pressures Recent developments will have given policymakers at Norges Bank food for thought ahead of December’s interest rate decision. While we had initially rejected the central bank’s guidance that it would... 16th November 2023 · 4 mins read
Europe Economics Update Riksbank to buck the trend and hike again While the world’s major central banks now appear to have ended their tightening cycles, we think the Riksbank will raise its policy rate by 25bp again next week, to 4.25%, because of the strength of... 16th November 2023 · 5 mins read
Europe Commercial Property Update European banks weathering CRE crash Despite the steepest crash in commercial property values on record, the credit risk and asset quality of European banks’ commercial real estate lending is holding up well. Further declines in values... 8th November 2023 · 3 mins read