Europe Economics Update Ukraine war to keep fiscal stance loose for longer The EU’s decision to suspend its debt reduction rule for another year gives countries the green light to ramp up spending on defence and cushion the blow from higher energy prices. Depending on how... 3rd March 2022 · 4 mins read
Emerging Europe Economics Update A deep dive into supply-chain links with Russia While supply-chain links between the EU and Russia and Ukraine are small, shortages of seemingly obscure inputs can cause significant disruption, and add to price pressures, if alternatives cannot be... 3rd March 2022 · 4 mins read
Europe Economics How could Europe cope without Russian energy? The EU would have a number of options to help compensate if Russian gas supplies were to be turned off, but in practice we suspect that some degree of power rationing would be needed. Past episodes of... 1st March 2022 · 4 mins read
Europe Economics Update Energy prices to push inflation up furthest in periphery The impact of the war in Ukraine on energy prices will have a bigger effect on inflation in Italy and Spain this year than in Germany and France. 1st March 2022 · 2 mins read
Emerging Europe Economics Update Russia and SWIFT: key questions answered In this Update, we answer the key questions about what the exclusion of Russian banks for SWIFT means for Russia and the rest of the world. In view of the wider interest, we are also sending this... 28th February 2022 · 6 mins read
Europe Economics Update Ukraine crisis won’t cause euro-zone recession The Ukraine crisis will be a drag on the euro-zone economy due to its effect on trade with Russia and the impact of higher energy prices on household consumption. However, this will be cushioned by... 28th February 2022 · 3 mins read
Europe Economics Update Six questions on Ukraine and the euro-zone The escalation of the Russia-Ukraine conflict has increased uncertainty about the economic outlook for the euro-zone. While things are changing rapidly, at this stage we think the main effects will be... 24th February 2022 · 7 mins read
Europe Economics Update Ukraine crisis could add 1.5% to EZ inflation this year In an extreme scenario, the impact of the Ukraine crisis on energy prices could add up to two percentage points to the peak in headline euro-zone inflation this year, and one-and-a-half percentage... 23rd February 2022 · 4 mins read
Europe Economics Update Inflation will remain higher in euro-zone core Inflation differentials across the euro-zone are unusually wide, in large part due to differences in energy inflation. But we don’t expect this to last. In the coming years, we think that inflation... 22nd February 2022 · 4 mins read
Europe Economics Update Replay of 2017 French election fears unlikely this time French President Macron is on course to win re-election in April by a comfortable margin, and is likely to push for a lower tax burden and pension reform in his second term. His main rival Marine Le... 18th February 2022 · 3 mins read
Global Markets Update The outlook for German and Swiss Government bonds We think that the gap between the yields of 10-year German and Swiss government bonds will re-emerge over the next couple of years as the ECB tightens policy more quickly than the SNB. In view of the... 17th February 2022 · 3 mins read
Europe Economics Update The Ukraine crisis and the euro-zone revisited While the simmering tensions over Ukraine could keep euro-zone inflation higher for longer than most expect, we think that it is unlikely to put the ECB off plans to start normalising policy this year... 16th February 2022 · 4 mins read
Europe Economics Update Rising wage inflation will embolden ECB hawks The tightening of labour market conditions in the euro-zone is likely to help push hourly wage growth up over the next couple of years to more than 3% y/y by 2023. This will serve to strengthen the... 16th February 2022 · 4 mins read
Europe Economics Update Lessons from Europe’s past wage-price spirals While there are limits to the lessons we can draw from the past, Europe’s experiences since World War Two provide some guidance as to the outlook for wages and inflation. They suggest that the recent... 10th February 2022 · 4 mins read
Nordic & Swiss Economics Update Riksbank unlikely to buck the trend for much longer While the Riksbank largely stuck to its dovish stance this morning, the fact that three of the six members of the Executive Board entered reservations and favoured reducing the size of the balance... 10th February 2022 · 3 mins read
Europe Economics Update Will ECB tightening cause a fresh crisis? Any policy tightening by the ECB in 2022-23 will probably be too limited to cause major problems in the bond market. But if interest rates rise much further than we anticipate, that could trigger... 9th February 2022 · 4 mins read