Europe Economics Update Italy’s debt-to-GDP ratio will soon start to rise Italy’s economy would need to grow more quickly than it has over the past twenty years to prevent the public debt ratio from rising. Given the country’s demographics and poor productivity performance... 5th February 2019 · 1 min read
Europe Economics Update German household spending to pick up The weakness of German consumption growth last year resulted partly from problems in the auto industry and partly from slowing real household income growth. Spending growth will probably accelerate a... 4th February 2019 · 1 min read
Europe Economics Update Dutch current account surplus to remain high In our view, the Netherlands’ huge current account surplus, at around 10% of GDP last year, is unlikely to fall much anytime soon. Household saving will stay high, the government budget will remain in... 1st February 2019 · 1 min read
Europe Economics Update Why is Italy in recession? The recession in Italy last year appears to have been due to a combination of (temporary) disruption in the car sector and a (perhaps less temporary) decline in confidence among consumers and firms... 31st January 2019 · 1 min read
Nordic & Swiss Economics Update Norway housing market stabilising, Sweden slowing Norway’s housing market struggled last year but looks set to do better in 2019. By contrast, construction in Sweden is likely to contract this year, causing the economy to slow sharply. 31st January 2019 · 1 min read
Europe Economics Update Auto sector cannot account for weak Q4 GDP growth Problems in the auto industry explain most of the slowdown in euro-zone GDP growth in Q3 last year. But in Q4, although car production remained weak, it did not fall further, and it will not have... 29th January 2019 · 1 min read
Europe Economics Update Dovish change to ECB guidance likely soon Following today’s ECB press conference, we think that the Bank will soon change its forward guidance to make it clear that it won’t raise interest rates until 2020 at the earliest. We also suspect... 24th January 2019 · 1 min read
Nordic & Swiss Economics Update Norges Bank too optimistic on GDP growth Following today’s monetary policy announcement, the Norges Bank is almost certain to raise interest rates in March. But we think that it is still too optimistic about prospects for the economy this... 24th January 2019 · 1 min read
Europe Economics Update Euro-zone slowdown due to more than just exports The slowdown in the euro-zone economy last year was driven partly by a decline in export growth and partly by weakening household consumption growth. This year, we suspect that consumption growth will... 23rd January 2019 · 1 min read
Europe Economics Update Draghi’s successor likely to be more hawkish Whoever becomes the next ECB President is likely to be more “hawkish”, and perhaps less effective, than Mario Draghi. That may not matter if the economy recovers from its recent soft patch, allowing... 22nd January 2019 · 1 min read
Europe Economics Update What to expect from elections in Europe this year In a busy election calendar this year, the focus will be on the rise of populist and euro-sceptic parties. Elections for the European Parliament in May are the most high profile event, but there will... 17th January 2019 · 1 min read
Europe Economics Update ECB losing its optimism The account of the ECB’s last meeting confirms that the Governing Council was less confident about the economic outlook, even in mid-December. While policy loosening is very unlikely for now, the... 10th January 2019 · 1 min read
Europe Economics Update New (lower) forecasts for the euro-zone We are revising our forecasts for economic growth in the euro-zone and now expect GDP to increase by only 1% this year and a bit less in 2020. Core inflation is also likely to be around 1% this year... 9th January 2019 · 1 min read
Nordic & Swiss Economics Update Riksbank’s surprise hike unlikely to be a one-off The Riksbank’s surprise decision to hike interest rates today supported our long-held call that it would tighten policy more aggressively than investors anticipate. But there is a clear risk that a... 20th December 2018 · 1 min read
Europe Economics Update Business surveys highlight particular weakness of Italy While business surveys have weakened throughout the euro-zone, they imply quite different things for growth in each economy. The Spanish surveys still bode well. But the German and French indicators... 18th December 2018 · 1 min read
Europe Economics Update ECB’s growing caution raises chance of later rate hikes While the ECB has ended its net asset purchases, it plans to reinvest funds from maturing securities for a long time to come and has stressed that any future rate hikes will depend on a build-up of... 13th December 2018 · 1 min read
