Filtered by Subscriptions: Europe Economics Use setting Europe Economics
ECB President Mario Draghi’s statement last week that “QE falls squarely in our mandate” was perhaps the strongest signal yet that the ECB is considering bolder policy support. But Bundesbank President Jens Weidmann voiced his discomfort with even the …
21st July 2014
Construction is set to remain one of the worst performing parts of the French economy. The sector’sproblems are symptomatic of the challenges facing the broader economy. … Subsidence in the French construction …
18th July 2014
The recent underperformance of the French economy compared to Germany reflects fundamentalfactors that will drive an even greater wedge between the two economies over time. Thisdivergence will complicate both monetary and fiscal policy-making in the …
17th July 2014
May’s euro-zone trade data provided some tentative signs that exports may bebeginning to pick up. But the external sector remains too weak to offset fears that thedomestic recovery is faltering at an early stage. … Euro-zone Trade …
16th July 2014
Slovenia’s recent election looks set to produce a government that will dilute the country’s muchneededprivatisation programme. Nonetheless, on balance, the new administration will probably helpconsolidate Slovenia’s fragile economic recovery. … New …
15th July 2014
July’s fall in German ZEW investor sentiment added to signs of a slowdown in theeuro-zone’s largest and strongest economy. … German ZEW Survey …
The sharp fall in euro-zone industrial production in May suggests that the recovery in the sector is flagging before it has even really begun, boding ill for the region’s overall economic recovery. … Euro-zone Industrial Production …
14th July 2014
Data published last week revealed that production fell in all four of the euro-zone’s largest economies in May. But the downturn in Germany has been most disappointing given hopes that this industrial powerhouse might drive an economic revival in the …
The recent rise in Portuguese government bond yields related to fears for its banking sector confirms that policymakers have done little to weaken the “doom loop” between banks and sovereigns in the euro-zone’s periphery and highlights the fragility of …
10th July 2014
The sharp falls in Italian and French industrial production in May were another sign that the sector’s recovery is already flagging before it has even really begun. … French & Italian Industrial Production …
The ECB’s prospective ABS purchases might ultimately help to strengthen the euro-zone financial system. But they will not stave off the immediate disinflationary pressures facing the region. … ABS purchases will not take QE off the …
9th July 2014
The Swedish Riksbank’s interest rate cut last week will put pressure on the Norges Bank to follow suit. We expect the Bank to cut its policy rate by the end of the year. And as spending in the energy and household sectors struggles to pick up, the Bank …
8th July 2014
While the European economic recovery probably picked up a bit of speed in the second quarter of the year, there are growing signs that Q2 was as good as it is likely to get. Activity indicators in the euro-zone have softened again in the last few months, …
Germany’s May industrial production figures arguably brought the strongest warning yet that the euro-zone’s fledgling economic recovery is in danger of grinding to a halt. … German & Spanish Industrial Production …
7th July 2014
Recent policy developments support our expectation that the euro will fall against the US dollar. We forecast a rate of $1.30 at end-2014 and $1.25 at end-2015. But that fall could be too little too late to revive the flagging recovery and head off …
The ECB is relying strongly on measures announced last month to counter the threat of deflation, but we doubt that they will be effective. A bolder programme of asset purchases is still likely to be required and the Bank’s failure to acknowledge this …
3rd July 2014
Ireland’s Q1 GDP figures suggest that the recovery is now gathering a decent amountof pace, which should help the country to tackle its debt problems. … Ireland GDP …
May’s euro-zone retail sales data showed that spending on the high street has weakened since the first quarter, providing further evidence that the region’s recovery may be slowing before it has even really begun. … Euro-zone Retail Sales (May) & Final …
Sweden’s central bank today cut its main policy rate by a bigger-than-expected 50bp to 0.25% and pushed back the date at which it first expects to raise rates until the end of 2015 in order to fight off the growing threat of deflation. … Swedish Riksbank …
In Q2, the euro-zone probably saw a small improvement on Q1’s 0.2% rise in GDP. But falls in the latest activity indicators such as the PMI and the EC’s ESI suggest that the region’s recovery could be starting to lose some steam. (See Chart.) Admittedly, …
2nd July 2014
Fears that Sweden might be about to enter a Japanese-style “lost decade” of deflation and stagnation are not entirely without foundation. But we think that Sweden should be able to avoid such an outcome, even though growth is likely to be slower than …
Although progress is still slow, the latest euro-zone fiscal data provided more evidence that peripheral governments are gradually strengthening their fiscal positions. … Euro-zone Fiscal Monitor …
May’s rise in Italy’s unemployment rate highlights the dire economic situation of households. And with inflation now slowing sharply, the country’s public debt ratio risks rising inexorably higher. … Little relief in sight for Italian …
1st July 2014
May's unemployment data highlighted that the euro-zone’s economic recovery is still too weak to erode the significant amount of slack in the labour market. … Euro-zone Unemployment (May) & Final Manu. PMI …
May’s small improvement in the euro-zone monetary data will not be enough to shake off concerns that the financial sector is a brake on the recovery and does little to diminish the risk that the region could slip into deflation. … Euro-zone Monetary …
30th June 2014
June’s weak euro-zone inflation figures will add to pressure on the ECB to provide more policy support, particularly given recent signs that the recovery may already be slowing. … Euro-zone Flash CPI …
Last week's euro-zone economic data added to the growing weight of evidence that the fledgling recovery in the currency union - which only really got going a year ago - is already running out of steam. Key surveys like the PMI, EC survey and German Ifo …
June’s EC Business and Consumer Survey added to signs that the euro-zone recovery could be nearing a peak when it has barely begun. … Euro-zone EC Survey & German CPI estimate …
27th June 2014
The ECB is very unlikely to unveil additional policy support at its policy meeting on 3rd July as it waits to judge the effect of the raft of measures announced in June. President Draghi is likely to reiterate that interest rates should be on hold for a …
26th June 2014
Contrary to official forecasts, Italy’s huge public debt is unlikely to fall over the coming years. Given the size of the economy, this will leave not only Italy in a very precarious position, but also the wider euro-zone. … Can Italy really stop its …
25th June 2014
June’s Ifo survey added to signs that German GDP growth may already be slowing at what should have been an early stage of the recovery. … German Ifo Survey …
24th June 2014
The French economy is probably faring a little better than June’s dreadful PMIs suggest. But more austerity and weak competitiveness mean that it will continue to weigh on the euro-zone’s recovery. … PMIs highlight France’s stuttering …
23rd June 2014
June’s PMIs suggested that the euro-zone recovery only gained a little momentum in Q2 and highlighted the continued divergence between France and Germany. … Euro-zone Flash PMIs …
Data last week revealed that euro-zone labour costs growth fell to just 0.9% in Q1, adding to evidence of deflationary pressure in the region. The fall in wage growth has not been confined to the public sector or to the peripheral economies. And while …
As we expected given signs of a slowdown in the energy sector, the Norges Bank pushed back its first projected rate hike until 2016. Although the krone weakened on the news, the economic slowdown may generate more downward pressure on the currency. … …
19th June 2014
The Swiss National Bank (SNB) today maintained its strongly supportive policy stance, pledging to enforce the ceiling on the Swiss franc with “the utmost determination”. We think that the SNB will be forced to renew its currency interventions before long. …
The Swiss National Bank (SNB) today maintained its strongly supportive policy stance, pledging to enforce the ceiling on the Swiss franc with “the utmost determination”. We think that the SNB will beforced to renew its currency interventions before long. …
June’s fall in ZEW economic expectations suggested that investors were unimpressed by recent ECB action and added to signs that the German recovery is nearing a peak. … German ZEW Survey (Jun.) & Euro-zone Labour Costs …
17th June 2014
Industrial production is now expanding faster in the euro-zone’s periphery than in the core. While this reflects progress made towards restructuring in the peripheral economies, industry still faces big constraints that will prevent the sector powering …
16th June 2014
April’s euro-zone trade data suggested that the strong euro continues to undermine export growth, highlighting that the ECB still has more to do to support the recovery. … Euro-zone Trade (Apr.) & Employment …
13th June 2014
Finland has gone from being one of the euro-zone’s strongest performers pre-crisis to one of the worst, following the demise of its key industries. Reforms to boost growth will take time and effort, suggesting the period of very low or negative growth …
12th June 2014
April’s rise in euro-zone industrial production suggests that industry is strengthening after a weak start to the year. But the recovery remains weak by historical standards. … Euro-zone Industrial Production …
The EC’s latest batch of country reports shows that the euro-zone has already achieved substantial structural reform and fiscal consolidation. But the region faces several more years of painful reform. … More austerity pain to come for …
11th June 2014
Today’s Italian Q1 GDP breakdown and industrial production data suggested that the economy might return to growth in Q2. But France’s latest industrial production figures show that the recovery there remains pretty weak. … French & Italian Ind. …
10th June 2014
While the ECB made a number of announcements last week, the policies involved are not as bold as they might seem. The interest rate cuts were clearly tiny and the decision not to sterilise bond purchases made under the Securities Markets Programme …
9th June 2014
