Europe Economics Update Strength in services price expectations a concern January’s European Commission business and consumer survey, released this morning, supports our view that the euro-zone economy will stagnate in Q1. But recent increases in services firms’ price... 30th January 2024 · 2 mins read
Europe Economics Update Money supply bottoming out but lending to stay weak Data released this morning suggest that the collapse in the euro-zone’s money supply might be over. But we expect money and lending growth to remain fairly weak. 26th January 2024 · 2 mins read
Europe Economics Update Riksbank to cut rates in second half of year The Riksbank is set to leave its key policy rate unchanged next week but we think it will begin to cut rates in the second quarter and reduce them faster than policymakers are forecasting. 25th January 2024 · 5 mins read
Europe Economics Update ECB signals summer rate cut The ECB kept interest rates unchanged and stuck to the argument that a first rate cut is most likely in the summer. An earlier move is still possible if the inflation data are weak in the next few... 25th January 2024 · 3 mins read
Europe Economics Update Norges Bank policy rate to fall quickly in H2 Norges Bank today reiterated that it will leave its policy rate at 4.5% “for some time”. But we think that inflation will fall rapidly this year, so when the Bank does start to cut rates, it will do... 25th January 2024 · 3 mins read
Europe Economics Update Norges Bank’s turn to hold We think Norges Bank will keep its policy rate unchanged at 4.50% next week but, given the weakness in the krone and tight labour market, retain a hawkish bias in its guidance. Further ahead, we think... 18th January 2024 · 3 mins read
Europe Economics Update Domestic price pressures easing but from high level The latest euro-zone inflation data, published this morning, will dampen policymakers’ concerns about the strength of domestic price pressures. But with underlying inflation still too high for comfort... 17th January 2024 · 3 mins read
Europe Economics Update The impact of a rise in the ECB’s reserve requirements Some ECB Governing Council Members have called for an increase in reserves requirements, primarily in order to reduce the Eurosystem’s interest expenditure. If implemented – which we think is likely –... 10th January 2024 · 4 mins read
Europe Economics Update German industry still has further to fall Industrial output in Germany is likely to follow November’s decline with further falls this year. While the recent fall in natural gas prices could help to stem the bleeding in the near term, energy... 9th January 2024 · 4 mins read
Europe Economics Update Increase in bank lending won’t stop ECB from cutting Data released this morning showed that bank lending in the euro-zone picked up towards the end of last year. But we doubt that this is the start of a sustained turnaround. We expect the impact of... 2nd January 2024 · 3 mins read
Europe Economics Update Costa resignation won’t reverse Portugal debt progress The end of Portuguese Prime Minister António Costa’s time in office does not signify the end of Portugal’s impressive period of debt reduction. We think any future government is likely to exercise... 20th December 2023 · 4 mins read
Europe Economics Update Domestic price pressures are strong but easing Last week, Christine Lagarde cited high wage growth and “domestic inflation” as reasons for the ECB to keep interest rates high. While domestic price pressures are easing, it will take several months... 19th December 2023 · 4 mins read
Europe Economics Update ECB holding the line for now The ECB left interest rates on hold today and pushed back against expectations that it will start cutting rates as soon as March next year. However, we think inflation and GDP growth will be lower... 14th December 2023 · 3 mins read
Europe Economics Update Norges Bank tightening cycle comes to an end Today’s decision by Norges Bank to hike its policy rate by 25bp to 4.50% marks the end of its tightening cycle. Looking ahead, we have pencilled in a faster pace of rate cuts next year than... 14th December 2023 · 3 mins read
Europe Economics Update Dovish hold by SNB, policy loosening imminent Today’s SNB decision and statement were largely in line with expectations as the policy rate was held at 1.75% and policymakers removed any mention of FX sales. We think the latter decision signals... 14th December 2023 · 3 mins read
Europe Economics Update Tide turns towards rate cuts in Switzerland SNB Chairman Thomas Jordan recently reiterated the Bank’s line that “we will not hesitate to tighten monetary policy further if necessary” but the actual question is whether policymakers will hesitate... 7th December 2023 · 5 mins read
