Europe Economics Europe falling further behind on the virus front A new wave of coronavirus cases in Europe, and the pause in usage of the AstraZeneca vaccine, raises the risk that the EU will fall even further behind the UK and US in its recovery from the pandemic. 17th March 2021 · 4 mins read
Nordic & Swiss Economics Update Making sense of the DNB’s “technical adjustments” The recent technical adjustments to the Danish Nationalbank’s monetary toolkit simplify the policy framework and are not intended to alter the policy stance. But with the Danish krone at its strongest... 12th March 2021 · 3 mins read
Europe Economics Update Italy will struggle to grow as restrictions tightened With infections rising and restrictions being tightened, we expect Italy’s economy to do little more than stagnate in the first half of the year. Activity in the retail and hospitality sectors will... 12th March 2021 · 2 mins read
Europe Economics Update ECB’s dovish surprise to suppress bond yields The ECB’s statement that it expects the pace of its PEPP purchases to be “significantly higher” in the coming quarter suggests that it will, at a minimum, resist further upward pressure on bond yields... 11th March 2021 · 3 mins read
Europe Economics Update Assessing the slack in the euro-zone’s labour market The euro-zone’s labour market has held up much better than anybody had anticipated over the past year. But the amount of slack in the market is still greater than it was before the pandemic hit... 11th March 2021 · 3 mins read
Europe Economics Update German auto problems should be temporary January’s slump in auto production looks likely to be sustained throughout the first quarter and to knock around 0.5% points from German GDP. However, the impact on the euro-zone aggregate will be... 10th March 2021 · 2 mins read
Europe Economics Update Netherlands to continue to outperform Dutch GDP fell much less than the euro-zone average last year and, even though the economy is unlikely to avoid contraction in Q1, we think it will regain its pre-crisis level sooner than any other... 10th March 2021 · 4 mins read
Europe Economics Update Inflation expectations not a major concern for ECB Financial market-based measures of inflation expectations have returned to pre-pandemic levels, but consumers’ and firms’ expectations are generally more subdued, and the increase in industrial firms’... 9th March 2021 · 4 mins read
Europe Economics Counting the cost of the EU’s slow vaccine rollout The underwhelming vaccine rollout in Europe will probably delay the easing of restrictions and means that the best of the vaccine bounce will be pushed into Q3. That said, the planned EU-wide vaccine... 2nd March 2021 · 3 mins read
Europe Economics Update How will the ECB respond to the rise in bond yields? The recent increases in real bond yields leave them still at low levels, but ECB policymakers nonetheless seem uncomfortable. Their verbal interventions have had little impact so far, so we think that... 26th February 2021 · 2 mins read
Nordic & Swiss Economics Update What to make of the weaker Swiss franc? The recent fall in the Swiss franc against the euro will be music to the SNB’s ears, and we think that there is plenty of scope for the currency to drift lower over the coming years. 24th February 2021 · 3 mins read
Europe Economics Update German inflation: below but close to 4%? We are raising our forecast for HICP inflation in Germany and expect it to peak at over 3.5% this year. But we doubt that this will prompt any policy tightening by the ECB because aggregate euro-zone... 23rd February 2021 · 4 mins read
Europe Economics Update Governments likely to avoid a labour market cliff edge We think the risk of surge in unemployment and slump in household incomes later this year is quite low. Euro-zone governments are choosing to extend their job support schemes and will probably scale... 17th February 2021 · 3 mins read
Europe Economics Update Norges Bank to start raising rates later this year We forecast the Norges Bank to be the first advanced central bank to begin raising interest rates, in the second half of this year. This will further bolster the krone, which we expect to be the best... 17th February 2021 · 3 mins read
Europe Economics Update Portugal’s recovery shifting into reverse After a relatively mild first wave of coronavirus, Portugal is now contending with the worst second wave in Europe. Another economic contraction in Q1 is all but certain and more delays to the vaccine... 16th February 2021 · 7 mins read
