Europe Economics Update Impact of 10% US tariff on euro-zone would be small We think that the impact of Trump’s proposed 10% universal tariff on euro-zone GDP would be very small, in part because we expect the effect to be offset by a weaker euro. So we aren’t pushing down... 15th November 2024 · 4 mins read
Bonds Update What to make of shrinking swap spreads in Germany We wouldn’t read much into the recent contraction in swap spreads in Germany. Despite turning negative, the 10-year euro-zone OIS/Bund spread is not far below its level before the pandemic. And it... 14th November 2024 · 5 mins read
Emerging Europe Economics Update Trump and the war in Ukraine Donald Trump’s re-election has changed perceptions of how the war in Ukraine will develop, with many hoping for a quicker end to the conflict. This Update looks at how the war might evolve and the... 14th November 2024 · 8 mins read
Europe Economics Update Tariff threat to German auto sector another headwind If Donald Trump follows through on his threat to impose a high sector-specific tariff on European cars, German firms could suffer a big reduction in exports, deepening the crisis in the sector and... 13th November 2024 · 3 mins read
Europe Economics Update The costs of Spain’s floods and future climate events The recent floods in Spain have inflicted huge personal and financial costs. But in terms of GDP, the effect is likely to be quite small as the temporary loss in activity will probably be offset by... 12th November 2024 · 4 mins read
Event Europe Drop-In: Germany's political crisis – Macro and market consequences 1731510000 Could the collapse of Germany’s ruling ‘traffic light’ coalition open the way to more effective governance for Europe’s largest economy?
Europe Economics Update The economic impact of Germany’s early election The collapse of its coalition government, triggered by disagreement over fiscal policy, means Germany will probably have a CDU-led government by mid-2025. This may be more stable and functional than... 7th November 2024 · 7 mins read
Europe Economics Update Bumper cut today, but smaller cuts to follow Today’s 50bp cut is likely to be the only one in the cycle for the Riksbank, and we expect it to cut by just 25bp at its next two meetings to take the policy rate to its “terminal” level of 2.25% in... 7th November 2024 · 3 mins read
Europe Economics Update Norges Bank to start cutting in early 2025 Alongside its decision to leave interest rates unchanged today, Norges Bank reiterated that it expects to remain on hold in December too. It is likely to start cutting in Q1 next year and we suspect... 7th November 2024 · 3 mins read
Europe Economics Update Euro-zone labour market is loosening Data released last week showed that the euro-zone’s unemployment rate was unchanged at a record low in September. But a broader assessment of the labour market suggests that it is cooling, and the... 5th November 2024 · 3 mins read
Europe Economics Update Euro-zone investment growth to remain weak Euro-zone investment has been weak since the pandemic. And despite the recent downward revision to our ECB interest rate forecasts, we don’t think it will pick up substantially, given the sluggish... 1st November 2024 · 4 mins read
Europe Economics Update One step at a time for the Riksbank Despite the Riksbank reopening the door to a 50bp cut at its last meeting, we think it will proceed gradually and cut by 25bps next week to 3.0%. This is because the policy rate is approaching the... 31st October 2024 · 5 mins read
Europe Economics Update Norges Bank to leave door open for December rate cut Norway’s economy is struggling and inflation keeps falling faster than Norges Bank expects, yet the Bank has not started loosening policy. Next week we think it will open the door to a December rate... 31st October 2024 · 2 mins read
Europe Commercial Property Update French residential property returns to lag the pack Softer rental prospects, less scope for yields to fall and lower income returns look set to weigh on French residential property returns compared to Germany, the UK and the US in the coming years. 29th October 2024 · 3 mins read
Europe Economics Update ECB to cut deposit rate to just 1.5% In light of the worsening outlook for economic growth and inflation in the euro-zone, we are making major downward revisions to our ECB interest rate forecast. We now think the Bank will implement... 28th October 2024 · 4 mins read
Europe Economics Update Lending growth picking up only gradually New bank lending has risen recently as the interest rates on loans have begun to edge down, but it is still weak. While it will probably continue to increase gradually in the coming months, the ECB... 25th October 2024 · 2 mins read
