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With the Norwegian economic recovery beginning to look a little more fragile, the Norges Bank has begun to strike a more cautious tone. Although the Bank is likely to raise interest rates again later this year, monetary policy will remain accommodative …
24th March 2010
March’s increases in the euro-zone PMI and German Ifo surveys bring some encouragement that the economic recovery in the region has not ground completely to a halt, but the outlook remains fragile. … Euro-zone Flash PMIs & German Ifo …
Worries about euro-zone fiscal plans have centred mainly on governments’ overly optimistic forecasts for real GDP growth. But weaker inflation could also pose a problem for the region’s public finances, adding to concerns that many governments will …
23rd March 2010
Developments of the past week have brought very little comfort for the euro-zone’s troubled periphery. There has been only limited progress on aid for Greece and the EC has reiterated the need for aggressive fiscal consolidation there and in Spain, …
22nd March 2010
While worries about Greece’s fiscal position have recently eased somewhat, the EC’s latest assessments underline the need for a prolonged bout of fiscal consolidation right across the euro-zone over the coming years. … Euro-zone fiscal squeeze far from …
17th March 2010
March’s fall in German ZEW investor sentiment confirms that confidence in the economic recovery remains fairly fragile. And with euro-zone CPI inflation still very subdued, the ECB is under no pressure to raise interest rates any time soon. … German ZEW …
16th March 2010
Recent more positive developments in Greece have led to some suggestions that the Greek crisis is finally over. But Greece still has a number of major challenges. … Is the Greek crisis really …
15th March 2010
For now, at least, Greece has persuaded the European Commission (EC) that it can meet its ambitious fiscal target for 2010. But the Greek crisis is far from over. Indeed, with the economy set to contract sharply this year, additional fiscal measures may …
12th March 2010
The latest euro-zone industrial production figures provide some hope that the recovery in the wider economy has not ground to a complete halt. … Euro-zone Industrial Production …
The second release relating to Portuguese GDP in Q4 last year revealed a downward revision to the quarterly change in output from the previously estimated zero to -0.2%. So after fairly robust growth in Q2 and Q3 (+0.5% and +0.6% respectively) last year, …
11th March 2010
Q4’s Italian GDP figures were pretty dreadful. With domestic demand still very fragil and a fundamental lack of competitiveness hampering the external sector, Italy looks set to stage a slow and unspectacular recovery in 2010 at best. … Italian GDP (Q4), …
10th March 2010
The latest German industrial production figures provide some hope that the economic recovery has not ground to a complete halt. … German Industrial Production …
8th March 2010
On the whole, last week’s news on the euro-zone economy was once again pretty disappointing. But the recent stabilisation in the unemployment rate is at least a little more encouraging. Unfortunately, this is unlikely to mark the beginning of the end of …
The ECB is withdrawing its unconventional policy support a bit more quickly than had been expected. But its gloomy take on the economic outlook and the prospect of aggressive fiscal tightening in Greece and elsewhere suggest that any tightening of …
4th March 2010
The second euro-zone GDP release for Q4 brings some hope that the slowdown in growth at the end of last year at least partly reflected temporary factors. But the recovery in the region remains fragile. … Euro-zone GDP …
Recent weeks have brought signs that the recovery in the euro-zone might have ground to a halt. Q4’s GDP release confirmed that the region expanded by just 0.1% on the quarter. (See Chart.) And recent business surveys, together with the bad weather, …
3rd March 2010
February’s final PMI survey suggests that the euro-zone economy is still expanding only slowly. And with retail sales falling again in January, the much-needed consumer recovery has yet to materialise. … Euro-zone Retail Sales (Jan.) & Final PMI …
The news that the Greek Government will tomorrow announce further measures to reduce its budget deficit raises hope that it will receive the firmer support from the rest of the euro-zone it requires to meet its short-term financing needs. But the Greek …
2nd March 2010
The Swiss economy is faring better than others in Europe, posting a 0.7% quarterly expansion in Q4. Such a strong pace is unlikely to be sustained, but we have revised up our forecast for GDP growth this year from 1.0% to 1.7%. … Swiss GDP …
January’s increase in euro-zone unemployment shows that households’ real incomes remain under strain despite very low inflation. At least February’s final Purchasing Managers’ Index points to a continued recovery in the manufacturing sector. … Euro-zone …
1st March 2010
Q4’s Swedish GDP figures revealed that the economy remains mired in recession, providing a warning to the Riksbank that monetary policy will need to remain very accommodative for the foreseeable future. … Swedish GDP …
Last week’s disappointing data releases begged the question of whether the euro-zone recovery has ground completely to a halt. The second GDP release confirmed that the German economy stagnated in Q4, while the latest business and consumer surveys for the …
The latest euro-zone, German and Spanish CPI figures highlight the continued lack of inflation pressure in the region. The ECB’s main worry should be the continued threat of deflation, rather than a surge in inflation. … Euro-zone CPI (Final Jan.), Ger. & …
26th February 2010
The ECB will announce the next step in its plan to phase out unconventional policy support this month. This might well be to increase the interest rate on its three-month loans to commercial banks. But its earlier generous provision of long-term loans …
25th February 2010
February’s EC consumer and business survey adds to the recent run of worrying evidence on the euro-zone’s prospects. Our forecast for the economy to expand by 1.5% this year will depend on a renewed pick-up in sentiment pretty soon. … Euro-zone EC Survey …
January’s euro-zone money supply and lending figures added to evidence that domestic demand remained very subdued at the start of this year. … Euro-zone Monetary Indicators Monitor …
The revelation that Greece used complex financial assets to improve the official figures on the public finances earlier this decade highlights the uncertainty surrounding the reliability of these numbers. But with signs that Europe is developing a rescue …
24th February 2010
Recent trade union deals point to a slowdown in German wage growth, which will come as a welcome relief to hard-pressed exporters. This supports our view that a robust export recovery will see Germany outperform the euro-zone average this year. But it …
The second German GDP release confirmed that the recovery ground to a halt in Q4, with exports still rising, but domestic spending very weak. Sadly, the latest fall in consumer confidence suggests that a consumer recovery remains a distant prospect. … …
The latest data add to the recent run of bad news. With German Ifo business sentiment falling in February and French consumer spending dropping in January, there is little hope that the euro-zone recovery will be renewed this quarter. … German Ifo Survey …
23rd February 2010
The latest news from the euro-zone external sector suggests that although exports are expanding strongly, the strong euro is taking its toll on the sector. The recent weakening of the euro is therefore encouraging. But it is unlikely to do much to change …
22nd February 2010
The euro-zone composite PMI was unchanged in February, adding to evidence that the economy probably expanded at a fairly lacklustre pace at the start of this year. … Euro-zone Flash PMIs …
19th February 2010
Q4’s disappointing GDP figures suggested that the Norwegian economy is still in a reasonably fragile state. Accordingly, the Norges Bank risks derailing the recovery if it raises interest rates too aggressively. … Norwegian GDP …
18th February 2010
Despite growing fairly solidly in the last two quarters, Belgium shares some worrying similarities with Greece and the other troubled Southern euro-zone economies. But its stronger trade position and lower levels of household debt should ensure that it …
17th February 2010
December’s healthy rise in euro-zone exports suggests that exporters are continuing to cope with the strong euro. But the cost has been a sharp squeeze in firms’ margins. This casts doubts on whether the recovery can be sustained. … E-Z Trade Balance …
February’s fall in German ZEW investor sentiment is more bad news. But it probably reflects the euro-zone’s fiscal problems more than specific concerns about Germany. We still see the economy leading the region’s recovery. … German ZEW Survey …
16th February 2010
The fact that last week’s European Commission “accord” on Greece appears to have placated the markets temporarily is clearly encouraging for Greece. But with the Greek recession intensifying in Q4 and both Germany and the ECB putting pressure on the …
15th February 2010
Last week’s EU “accord” on Greece was long on vague pledges of support, but notably short on detail. For now, the markets have given the EU the benefit of the doubt. But if more meat is not put on the bones at Monday’s euro-group meeting, the markets’ …
The news that the euro-zone recovery lost what little momentum it had in Q4 will add to markets’ fears about the region. GDP rose by just 0.1% on the quarter after Q3’s 0.4% gain. Q4’s outturn was weaker than markets had expected, but broadly in line with …
12th February 2010
Q4’s GDP figures confirmed that Spain is one of a dwindling group of economies still in recession. And with its economic imbalances still largely intact, a meaningful recovery remains a distant prospect. Accordingly, it will be difficult for the …
11th February 2010
Speculation that a bail-out of Greece may be imminent has moved the focus on to exactly what form a rescue package may take. The precise details of any bail-out might have important implications for the troubled economy, markets and the rest of Europe. …
9th February 2010
As worries about the public finances spread throughout the euro-zone, France is the latest to edge on to the radar screens. Given a relatively low stock of debt and healthy economic outlook, its situation looks far better than that of Greece, Spain or …
8th February 2010
Last week, the noose around the Greek Government’s neck loosened slightly. But markets are still baying for blood – Portugal and Spain are their new targets. Neither Portugal nor Spain have quite the credibility problems of Greece, but both face …
The ECB is set to announce further plans to phase out unconventional policy support after its meeting next month. But with the Bank’s call for fiscal consolidation highlighting the downward pressure on future growth and inflation, official interest rates …
4th February 2010
The limited economic data so far released for January suggest that the new year has got off to a pretty sluggish start. The euro-zone composite Purchasing Managers’ Index fell for the first time in 11 months and suggests that GDP growth has yet to gather …
3rd February 2010
The European Commission’s endorsement of the Greek Government’s plan to get its public finances under control is unlikely to relieve market concerns over Greece’s position altogether. … EC’s endorsement won’t fully relieve Greek …
December’s euro-zone retail sales figures suggested that total consumer spending fell in Q4, adding to signs that the overall recovery lost pace. What’s more, January’s final PMI survey pointed to only a modest rise in activity at the start of this year. …
Fears that the further rise in Greek bond yields over the last week has stretched the public finances to breaking point may be a little over-done. Nonetheless, Greece still faces an enormous challenge if it is to meet its financing requirements and step …
2nd February 2010
France is one of few economies that seem to be experiencing a consumer revival. Sadly, fiscal tightening will prevent the recovery from gaining much momentum. But a fairly healthy household sector should still lead growth to outpace that in much of the …
1st February 2010
