Nordic & Swiss Economics Update Erik Thedéen a safe pair of hands to succeed Ingves The appointment of Erik Thedéen as the new Governor of the Riksbank will only strengthen the relationship between the Bank and the financial regulator, and could result in more macroprudential powers... 17th June 2022 · 2 mins read
Europe Economics Update Consumption to increase despite low confidence Despite consumer confidence remaining extremely low, we now think household spending in the euro-zone will edge up in Q2. Excess savings and a tight labour market have helped to cushion the blow from... 17th June 2022 · 3 mins read
Europe Economics Update Demand for labour to remain strong in the euro-zone Strong demand for labour, not a lack of potential workers, has driven the euro-zone’s unemployment rate to a record low. Employment gains have been biggest in public services and we expect demand for... 16th June 2022 · 4 mins read
Nordic & Swiss Economics Update SNB steals a march on the ECB After the excitement of yesterday’s ECB emergency meeting and 75bp hike by the US Fed, the SNB kept its end up by unexpectedly raising its policy rate by 50bps this morning – its first rate rise since... 16th June 2022 · 3 mins read
Europe Economics Update Pressure is on for ECB spread-fighting tool in July The ECB’s press release following its unscheduled meeting fell short of announcing a fleshed out spread-fighting tool that could provide a permanent solution to the problem. Flexible PEPP... 15th June 2022 · 3 mins read
Europe Economics Update ECB emergency meeting (June 2022) News that the ECB Governing Council is holding an emergency meeting today shows that policymakers are taking the threat of rising peripheral yields more seriously than they were last Thursday at their... 15th June 2022 · 3 mins read
Europe Economics Update Spreads will keep widening before ECB takes action We suspect that the spread between 10-year Italian and German government bonds would need to widen by another 100bp or so, to around 3.5%, to force the ECB to make a stronger formal statement of... 14th June 2022 · 3 mins read
Europe Economics Update Greece’s rebound has further to run Greece has already made a more complete recovery from the pandemic than most of its peers and the short-term outlook still looks relatively good. The country is less exposed to Russia-Ukraine risks... 13th June 2022 · 4 mins read
Europe Economics Update ECB tightening unlikely to cause house price crash Tighter ECB policy could cause house prices in the euro-zone to fall, but we think that a housing crash will be avoided even in the Netherlands where the risks are largest. BoE Preview Drop-In (14th... 10th June 2022 · 4 mins read
Europe Economics Update No majority would hinder, not upend, Macron’s plans The latest polls for this month’s legislative elections in France raise the possibility that Macron’s party and allies may not win a majority. But even so, support from the centre-right might avoid a... 9th June 2022 · 3 mins read
Europe Economics Update ECB to raise rates, and without a new backstop Today’s policy statement and press conference sets the stage for the ECB to raise interest rates by 75bp by September and we expect that to be followed by two more hikes this year. The Bank’s failure... 9th June 2022 · 3 mins read
Europe Economics Looming ECB rate hikes give SNB plenty to ponder We forecast the SNB to largely shadow ECB rate hikes over the next 18 months or so, albeit allowing the interest rate differential with the euro-zone to widen from 25bps at present to 50bps by end... 7th June 2022 · 4 mins read
Europe Economics Update PEPP redemptions no substitute for spread-fighting tool The ECB’s guidance that it can use PEPP reinvestments to contain bond spreads has a few big limitations. If the forthcoming interest rate hikes cause spreads to blow out, the ECB will either need to... 26th May 2022 · 3 mins read
Europe Economics Update ECB to follow Fed’s lead with 50bp hike With inflationary pressures remaining intense and policymakers keen to get the deposit rate out of negative territory, we now think the ECB is most likely to raise rates by 50bp in July and by 125bp... 26th May 2022 · 4 mins read
Europe Economics Update Answers to your questions on the ECB We held a Drop-In today to discuss our views on the ECB and what the chances are of a further hawkish surprise in the coming weeks. (You can see an on-demand recording here.) This Update answers... 24th May 2022 · 4 mins read
Europe Economics Update Rising interest costs add to pressure on EZ households We estimate that euro-zone households’ debt interest payments will quadruple as a share of income over the next couple of years as the ECB raises its policy rate. This will put yet further strain on... 24th May 2022 · 4 mins read
