Europe Economics Update Monetary Indicators Monitor (June) Policy measures from governments and the ECB to keep banks lending during lockdowns appear to have been successful, but as we have argued was likely to happen, loan growth is now slowing. Consumers’... 27th July 2020 · 4 mins read
Europe Economics Update Recovery Fund another positive step The final agreement on the Recovery Fund was a compromise reached after four days and nights of acrimonious negotiations and is less generous than first proposed. Nonetheless, it marks a historic step... 21st July 2020 · 4 mins read
Europe Economics Update ECB to remain in dovish mode At the press conference following today’s Governing Council meeting, ECB President Christine Lagarde dampened any suggestion that the Bank may not use the full €1.35 trillion in its emergency purchase... 16th July 2020 · 3 mins read
Nordic & Swiss Economics Update Norway experiencing a shallow “U” The pick-up in mainland Norwegian GDP in May was a tad underwhelming, with the economy’s recovery now seeming to follow a shallow “U” rather than the deep “V” seen in the euro-zone. Nonetheless, the... 8th July 2020 · 3 mins read
Europe Economics Update Revising up our annual growth forecasts The post-lockdown rebound has been quicker than we anticipated, so we are revising up our euro-zone GDP forecast from -12% to -7% for 2020. That does not alter our view that the economy will remain... 7th July 2020 · 3 mins read
Europe Economics Update Revising up our euro-zone Q2 GDP forecast The slump in euro-zone GDP in March and April was just as large as we had feared, but the subsequent recovery has been quicker than we expected. As a result, we now think that GDP probably contracted... 7th July 2020 · 4 mins read
Nordic & Swiss Economics Update Riksbank beefs up monetary stimulus The Riksbank has put its money where its mouth is when it comes to expanding its balance sheet, but in our view all roads still lead to a return to negative interest rates, either in late-2020 or... 1st July 2020 · 4 mins read
Europe Economics Update EU rescue fund no match for Hamilton’s handiwork While the proposed joint EU fiscal response has been hailed by some as a “Hamilton moment”, the central budget will be just one-quarter as large as a share of GDP as US federal firepower was in the... 29th June 2020 · 4 mins read
Europe Economics Update Monetary Indicators Monitor (May) The current burst of bank lending suggests that governments’ loan guarantees and the ECB’s TLTROs are having the desired effects. Now that economies are re-opening, corporate revenues should begin to... 26th June 2020 · 4 mins read
Europe Economics Update ECB account addresses German legal dispute The ECB has used the minutes of this month’s policy meeting to try to defuse the dispute in Germany over the legality of its asset purchase programmes. Helped by the Bundesbank, this should be enough... 25th June 2020 · 3 mins read
Europe Economics Update Greece faring better than we had feared While the Greek economy is set to slump this year, it is becoming increasingly clear that the drop in activity will be much less severe than we previously anticipated. We now think that the Greek... 25th June 2020 · 4 mins read
Europe Economics Update Will Germany’s 2009 jobs miracle be repeated? Euro-zone countries seeking to avoid a surge in unemployment have sought to replicate Germany’s short-time working scheme that served it well during the global financial crisis. Germany’s experience... 24th June 2020 · 3 mins read
Europe Economics Update German second wave risk looks low The increase in coronavirus cases in Germany is a reminder that the virus has not been eradicated and suggests that local restrictions may be re-imposed periodically in the coming months. But for now... 22nd June 2020 · 2 mins read
Europe Economics Update Consumption rebounded strongly in May If the recent increase in US retail sales is anything to go by, consumption in the euro-zone will have recovered sharply now that the lockdown restrictions have been eased. Indeed, evidence from... 18th June 2020 · 3 mins read
Europe Economics Update Strong TLTRO demand a good sign for bank lending Data published today show huge demand for the ECB’s targeted lending to commercial banks. So far, these operations and government loan guarantees have been successful in raising bank lending to the... 18th June 2020 · 2 mins read
Nordic & Swiss Economics Update SNB & Norges Bank to maintain the status quo This morning’s decisions by the SNB and the Norges Bank to leave interest rates on hold at -0.75% and zero respectively were never really in doubt. Both banks are set to leave policy unchanged... 18th June 2020 · 3 mins read
