Europe Economics Update Bank stress tests highlight Italy risks The EU bank stress tests suggest that even in a severe economic downturn, the region’s largest lenders would remain solvent. That said, the EBA’s very pessimistic “adverse scenario” might still be too... 2nd November 2018 · 1 min read
Nordic & Swiss Economics Update Riksbank set to tighten faster than investors expect While the minutes to the Riksbank’s October meeting all but confirmed that interest rates will start to rise in the coming months, a December hike is not a done deal. But regardless of whether the... 2nd November 2018 · 1 min read
Europe Economics Update Emissions testing to blame for Q3 slowdown Data on car production imply that delays related to emissions testing may have been entirely responsible for the slowdown in euro-zone GDP growth from 0.4% in Q2 to 0.2% in Q3. While the underlying... 31st October 2018 · 1 min read
Europe Economics Update Merkel’s step-down won’t derail the German economy The news that Angela Merkel will step down as head of the CDU has limited implications for the German economy since she will stay on as Chancellor for now and her likely successors broadly support her... 29th October 2018 · 1 min read
Europe Economics Update ECB sticks to its plans despite weaker data The ECB today reaffirmed its plans to normalise monetary policy gradually, expressing little concern about the recent run of weaker economic data or the clash between Italy and the European Commission... 25th October 2018 · 1 min read
Nordic & Swiss Economics Update Norges Bank tightening likely to end next year Although it left its policy stance unchanged today, the Norges Bank struck a slightly more hawkish tone. We continue to think it will raise rates again next March. But even as the Bank tightens policy... 25th October 2018 · 1 min read
Nordic & Swiss Economics Update Riksbank on track for December interest rate hike Although the Riksbank left monetary policy unchanged today, it is still on track to begin raising interest rates in December. We think that the Bank will then tighten more quickly than investors... 24th October 2018 · 1 min read
Europe Economics Update No end in sight for Italian fiscal stand-off The Italian Government’s reply to the European Commission suggests that there is unlikely to be a quick resolution to the current fiscal impasse. We expect yields to rise in the coming years. 22nd October 2018 · 1 min read
Europe Economics Update Implications of an Italy-EU budget clash On its own, the inevitable clash between the EU and the Italian Government is unlikely to have much of an economic impact, at least in the near term. However, the situation could well escalate next... 16th October 2018 · 1 min read
Europe Economics Update Rating downgrades are another threat for Italy Rating downgrades as soon as the end of this month may well push Italian bond yields higher, with adverse effects on the economy and the banks. Further downgrades to junk status seem feasible in... 11th October 2018 · 1 min read
Europe Economics Update Italy’s fiscal boost will fade in 2020 The fiscal stimulus planned by Italy’s Government should provide a small boost to GDP growth next year. But that boost will fade in 2020 just as the ECB is likely to be tightening monetary policy... 5th October 2018 · 1 min read
Europe Economics Update Why Italy is not the new Greece While Italy and Greece have some similarities, the fundamental cause of Italy’s problems is not fiscal laxity but consistently weak economic growth. So rather than resulting in a sudden crisis, as has... 3rd October 2018 · 1 min read
Europe Economics Update Wage growth in core and periphery set to diverge We think that faster wage growth in the core countries will drive aggregate euro-zone wage growth up over the next few years, prompting the ECB to raise interest rates. But wage growth in the... 3rd October 2018 · 1 min read
Nordic & Swiss Economics Update Iceland’s central bank signals higher rates on the cards Although the Central Bank of Iceland left monetary policy unchanged today, it reiterated that it was prepared to take action if inflation expectations rise further. We think that this is likely and... 3rd October 2018 · 1 min read
Europe Economics Update Italy’s banks still the weakest link Amid the concern about the state of Italy’s public finances, the banks remain the country’s weakest link. Indeed, despite improvements over the past few years, the banking sector is still too weak to... 3rd October 2018 · 1 min read
Europe Economics Update Greek budget highlights risk of fiscal slippage Greece’s draft budget for 2019 suggests that the country is taking its fiscal targets much more seriously than Italy. But a closer look at the proposed measures implies some fiscal slippage, which... 2nd October 2018 · 1 min read
