Nordic & Swiss Economics Update Governor Thedéen puts his foot on the brakes The Riksbank’s 50bp rate hike today was expected but the decision to begin actively selling government bonds and the emphasis on the exchange rate were a surprise. Possibly this simply reflects the... 9th February 2023 · 3 mins read
Europe Economics Update ECB deposit rate still set to reach 3.5% Whereas the Bank of England and (arguably) the Fed delivered dovish surprises over the past twenty four hours, we think the ECB decision did not amount to a clear change of policy stance. The ECB is... 2nd February 2023 · 3 mins read
Europe Economics Update New euro-zone forecasts: recession and slow recovery We think that the euro-zone will enter a recession in the first half of this year and then experience a slow recovery. Our new GDP forecasts show a 0.5% contraction in 2023 and growth of only 0.8%... 31st January 2023 · 3 mins read
Europe Economics Update Get ready for a German inflation surprise in January The reversal of temporary subsidies and changes to weightings will probably push headline German HICP inflation back up in January. But the bigger picture remains that the headline rate will fall... 27th January 2023 · 3 mins read
Europe Economics Update Lending weak and savers locking up their cash December’s euro-zone money and credit data show that the effects of rising interest rates were starting to be felt. Households and firms shifted their money into longer-term deposits which are less... 27th January 2023 · 2 mins read
Europe Economics Update Be wary of the Spanish inflation data A closer look at Spain’s inflation data shows that there are significant measurement difficulties affecting both energy and core price data. However, we still expect measured headline inflation to... 24th January 2023 · 2 mins read
Europe Economics Update Germany to avoid industrial recession We now think German industry will continue to grow in the coming months as lower gas prices, easing supply shortages and high backlogs of orders support production. 20th January 2023 · 4 mins read
Europe Economics Update ECB account suggests two more 50bp hikes likely The account of the December meeting, along with data released since then and recent comments from policymakers, suggest the ECB will raise its deposit rate from 2% to 3% by March rather than May as we... 19th January 2023 · 3 mins read
Nordic & Swiss Economics Update Norges Bank tightening nearly over The Norges Bank eased off the brakes today by leaving policy on hold, but signalled that it will raise its policy rate at the next meeting in March. We suspect that will be the final hike in this... 19th January 2023 · 3 mins read
Europe Economics Update Spanish inflation will soon be below 2% The fall in Spanish gas and electricity prices that has already happened is likely to cause energy inflation to slump to minus 20% in the coming months and this in turn will pull headline inflation... 16th January 2023 · 2 mins read
Europe Economics Update Q4 contraction may have been avoided The euro-zone economy held up a bit better than we expected at the end of last year. On balance, the data point to GDP flat-lining or contracting only slightly in Q4. 13th January 2023 · 2 mins read
Europe Economics Update ECB tightening starting to take effect November’s money and credit data showed that the effects of tighter ECB policy were only just starting to be felt. So while some of the recent economic data have been a bit stronger than expected, the... 11th January 2023 · 2 mins read
Europe Economics Update French pension reform could be agreed despite strikes Reform of the French pension system is notoriously difficult and it is possible that the proposals unveiled yesterday will be watered down or even withdrawn completely. However, on balance, we think... 11th January 2023 · 3 mins read
Europe Economics Update What lower gas prices mean for the euro-zone We have revised our European wholesale gas price forecast down and, as a result, now expect euro-zone inflation to fall more rapidly than we had previously anticipated. In turn, this means that real... 5th January 2023 · 3 mins read
Energy Update EU gas price cap unlikely to be triggered The EU’s new policy to limit gas prices is unlikely to be activated next year. And with so many caveats built in, it seems the only thing countries agreed on was that a cap was indeed needed to show... 20th December 2022 · 2 mins read
Europe Economics Update QT won’t stop rates from rising further Today’s 50bp rate hike came alongside hawkish comments which are consistent with our view that the deposit rate will peak at 3%, significantly higher than the consensus forecast and a touch above what... 15th December 2022 · 3 mins read
