Europe Economics Update Euro-zone industry will continue to struggle A large part of the decline in euro-zone industry over recent years shown by the monthly data appears to be due to mismeasurement. Nevertheless, the sector is struggling with a loss of international... 13th September 2024 · 4 mins read
Europe Economics Update Norges Bank to leave door open for December rate cut Inflation keeps falling more quickly than Norges Bank’s forecasts but policymakers will be uneasy about the renewed weakening of the krone. We expect them to repeat that the policy rate will be... 12th September 2024 · 2 mins read
Europe Economics Update ECB likely to ease policy gradually There was never any doubt that the ECB would cut its deposit rate by 25bp today, to 3.5%. Meanwhile, the policy statement and press conference were largely as expected and do not change our view that... 12th September 2024 · 3 mins read
Europe Economics Update Draghi & Letta proposals are no silver bullet In principle, an increase in EU integration and cooperation, as proposed by Enrico Letta in April and Mario Draghi today, could increase output in the long run. But any progress will be slow, and the... 9th September 2024 · 4 mins read
Europe Economics Update Budget gridlock will keep Belgium’s deficit high Belgium's political crisis and high budget deficit have largely gone unnoticed in past couple of months while all eyes have been on France. This Update answers some key questions about its political... 30th August 2024 · 3 mins read
Europe Economics Update Germany and Spain HICP (Aug.) Inflation figures for Germany and Spain suggest that euro-zone headline inflation may have fallen to the ECB’s 2% target in August and that the core rate edged down. That paves the way for a September... 29th August 2024 · 2 mins read
Europe Economics Update Progress towards Capital Markets Union will be slow Capital Markets Union (CMU) is regarded by many European policymakers as one of the key reforms needed to close the gap between EU and US productivity. But a full CMU is a long way off, and in any... 28th August 2024 · 4 mins read
Europe Economics Update EU semiconductor industry will continue to lag behind Although the EU is making progress in expanding its semiconductor production capacity, including through a new plant in Dresden, it is still a long way behind the US and Asia and is unlikely to catch... 23rd August 2024 · 5 mins read
Europe Economics Update Big fall in negotiated wage inflation The scale of the fall in negotiated wage inflation in Q2 was largely due to one-off payments made in Germany in March but not repeated in Q2. However, the underlying trend in wage inflation is clearly... 22nd August 2024 · 3 mins read
Europe Economics Update Services inflation will start falling again soon There are good reasons to expect services inflation to start falling again towards the end of this year and in 2025. But as long as wage growth remains high, services inflation will stay strong too. 20th August 2024 · 2 mins read
Europe Economics Update Dovish rate cut by Riksbank, more to follow We think the Riksbank will follow today’s 25bp rate cut with a cut at each of the three remaining meetings this year to take the policy rate to 2.75%. But we expect the terminal rate to be 2.5% which... 20th August 2024 · 3 mins read
Europe Economics Update Norges Bank remains hawkish Norges Bank’s decision to leave its policy rate unchanged at today’s meeting, at 4.5%, was never in doubt. However, we still suspect that continued declines in inflation will allow it to start cutting... 15th August 2024 · 3 mins read
Europe Economics Update Riksbank to cut rates with more on the way Since the Riksbank’s last meeting in June, Swedish inflation and activity data have been weaker than policymakers expected. We think this will encourage them to cut the key policy rate from 3.75% to 3... 14th August 2024 · 5 mins read
Europe Economics Update Norges Bank will stick to hawkish tone for now Inflation in Norway has continued to fall more quickly than policymakers expected. But with the krone coming under renewed pressure recently, we think they will maintain a hawkish tone next week. 9th August 2024 · 2 mins read
Europe Economics Update Strong franc opens door to FX purchases and rate cuts Recent safe haven flows into the franc may have prompted limited FX interventions by the SNB. But we think that the policy rate will remain its main policy tool, even for dampening the franc’s... 8th August 2024 · 3 mins read