Europe Economics Update Is Belgium’s public debt a cause for concern? We think it is most likely that future governments bring down Belgium’s budget deficit sufficiently to put its debt on a sustainable trajectory. However, the risks are that the deficit is higher than... 17th April 2024 · 4 mins read
Europe Economics Update Early Easter boosted inflation only slightly in March The detailed breakdown of March’s euro-zone HICP data, released this morning, show that the early timing of Easter boosted services inflation by 0.1ppts. This effect was smaller than in previous years... 17th April 2024 · 3 mins read
Global Economics Update Middle East tensions not yet a major threat to inflation As things stand, higher oil prices will boost inflation in advanced economies by only a few tenths of a percentage point in the months ahead and we still expect this boost to fade as the year goes on... 16th April 2024 · 4 mins read
Europe Economics Update Swiss economy not as strong as first meets the eye The resilience of Swiss GDP over the past two years has been largely due to the merchanting sector, which buys and sells goods without them ever entering Switzerland. Excluding that sector, the... 16th April 2024 · 4 mins read
Europe Economics Update ECB to cut by 100bp this year The ECB’s decision to update its guidance suggests that an interest rate cut at the next meeting in June is very likely. Christine Lagarde would understandably not commit to a path of rate cuts, but... 11th April 2024 · 3 mins read
Europe Economics Update Italy’s public finances still a cause for concern After a period of relative calm, Italy’s fragile public finances are likely to come under the spotlight again before long. Budget deficits will be much higher than the latest government projections... 10th April 2024 · 4 mins read
Europe Economics Update Bank Lending Survey points to continued weak activity The Q1 ECB Bank Lending Survey suggests that the drag on lending growth from tight monetary policy continued to ease. But the data remain consistent with broadly stagnant consumption and declines in... 9th April 2024 · 2 mins read
Europe Economics Update Wage data to watch ahead of the ECB’s June meeting ECB officials have stressed that evidence of easing wage growth will be key in determining the timing of the first rate cut. Accordingly, this Update assesses which of the euro-zone’s numerous wage... 3rd April 2024 · 6 mins read
Europe Economics Update Trump tariffs another risk for Europe The cost to the euro-zone of the universal tariff which Donald Trump has proposed, along with other likely spillovers from his trade policies, may result in a hit to the euro-zone economy of up to... 2nd April 2024 · 5 mins read
Europe Economics Update Money and lending growth will remain subdued February’s money and credit data suggest that the effect of tighter monetary policy has eased slightly. But the data are still very weak and we think that rate cuts later in the year will lead to only... 28th March 2024 · 3 mins read
Europe Economics Update Riksbank to cut rates faster than markets expect We think investors are underestimating the extent of rates cuts that the Riksbank will make this year. Policymakers are, rightly in our view, increasingly confident that inflation will soon return... 27th March 2024 · 3 mins read
Europe Economics Update Spanish inflation to remain high in 2024 Data released today showed that Spanish inflation picked up from 2.9% in February to 3.2% in March. We think it is likely to increase further over the coming months due to base effects in energy... 27th March 2024 · 4 mins read
Europe Economics Update SNB starts its loosening cycle, Norges Bank on hold The SNB under Chairman Thomas Jordan has never shied away from making big calls, so it was fitting that it surprised markets with a 25bp rate cut today, to 1.5%, only three weeks after Mr Jordan... 21st March 2024 · 3 mins read
Europe Economics Update Riksbank eyeing May for first rate cut We think the Riksbank will leave its policy rate unchanged at 4.0% next week but cut it by 25bp at the following meeting, in May. Beyond that, our forecast is for rates to come down much faster than... 20th March 2024 · 5 mins read
Europe Economics Update SNB to lead the G10 central banks in rate cuts Inflation in Switzerland has surprised most other forecasters, including the SNB, this year by falling to just 1.2% in February, which was the ninth month in a row that it has been below 2%. We think... 14th March 2024 · 5 mins read
Europe Economics Update Norges Bank rate cuts inching closer Inflation in Norway has fallen more quickly than Norges Bank expected, so at next week’s meeting it is likely to signal that it will cut interest rates sooner than it previously expected, perhaps in... 14th March 2024 · 2 mins read