Filtered by Subscriptions: Europe Economics Use setting Europe Economics
Last week brought some good news about the euro-zone economy, with October’s composite PMI and EC ESI both pointing to an acceleration of growth. But both the hard data and survey indicators look much weaker for France than for Germany. And as the labour …
28th October 2016
October’s rise in German HICP inflation to +0.7% suggests that euro-zone inflation in the same month rose to its highest level since April 2014. But in Germany at least, the rise reflected energy effects while underlying price pressures remained subdued. …
October’s rise in the EC measure of economic sentiment supports the message from the PMI that euro-zone growth accelerated towards the end of the year, albeit with continued divergence across countries. … EC Business & Consumer Survey …
October’s rise in the Swiss KOF Economic Barometer suggests that GDP growth could accelerate in the near term. But with the full effects of the franc’s strength yet to be felt and deflation risks persisting, monetary policy may still be loosened further. …
Provisional Q3 GDP data from France and Spain support the message from the business surveys that euro-zone GDP continued to increase at a pretty slow pace. And there are clear signs that the French consumer recovery is weakening. … France, Spain & Austria …
Headline Icelandic inflation was stable in October and the core rate fell slightly. But with the economy continuing to strengthen, we think that underlying inflation will pick up in the coming months. … Iceland Consumer Prices …
27th October 2016
September’s euro-zone money and credit data continued the positive trend of recentmonths, consistent with a further steady expansion of the economy. Nevertheless,the data suggest that inflation will remain well below the ECB’s target. … Euro-zone Monetary …
It seems very likely that the Riksbank will extend its bond purchase programme after it stepped up its dovish rhetoric and suggested that it might even cut the repo rate further. But given our expectation for growth and inflation to surpass the Riksbank’s …
The Norges Bank left its key policy rate on hold today and reiterated that no change was likely in the near future. But we think that more monetary loosening will be needed in 2017. … Norges Bank leaves policy unchanged, but rate cuts to …
Even if Spain’s new minority Government gets support for its 2017 Budget, it will struggle to build the consensus needed to pass other measures. Accordingly, political uncertainty will continue to weigh on Spain’s chances of meeting its fiscal targets and …
26th October 2016
The latest setbacks in ratifying an EU-Canada trade deal have larger direct economic implications for Canada than for the EU. But the political deadlock bodes ill for future EU trade agreements which could have been more beneficial and suggests that the …
October’s increase in the German Ifo Business Climate Indicator (BCI) adds to a recent run of positive news about the economy. Germany looks set to easily outperform the euro-zone average this year and next. … German Ifo Survey …
25th October 2016
The rise in the euro-zone Composite PMI to a ten-month high suggests that GDP growth may have picked up at the start of Q4. Nevertheless, there is a concerning divergence in conditions between the euro-zone’s largest economies. … Euro-zone Flash PMIs …
24th October 2016
Last week, the European Commission (EC) published the draft Budgets for 2017 as submitted by eurozone governments. On the face of it at least, there is little for the EC to be concerned about. All countries except Germany project improvements in their …
21st October 2016
The Norges Bank is almost certain to leave monetary policy unchanged at its meeting on 27th October. Indeed, at its last meeting in September the Bank changed the wording in its policy statement from “the key policy rate may be reduced in the course of …
Inflation has undershot the Riksbank’s forecastssince it last met to set policy in September. Butwe expect inflation to rise again before long, andwith economic conditions strong there is lesspressure to respond to temporary setbacks inhitting the …
20th October 2016
President Draghi did not explicitly promise imminent policy action today. But he signalled that assetpurchases would not end abruptly. And as tapering has apparently still not been discussed, we expectthe ECB to announce a six-month extension to its asset …
September’s Swedish Labour Force Survey confirmed that the previous month’s poorresults were a one-off and highlights the tightness of the labour market. With firms’hiring intentions picking up in recent months, employment should continue to rise. … …
The recent increase in French unemployment seems unlikely to be reversed rapidly. And while a new government may be elected next year promising job-boosting reforms, its success will be limited by resistance from both the European Commission and the …
18th October 2016
The Nordic and Swiss economies’ reasonable economic performance, low public debt and stable political backdrop should help to maintain their safe haven status. But there will be some marked economic and policy divergences. Slow growth and low inflation in …
17th October 2016
Fears that domestic price pressures might prompt the Swiss National Bank to tighten monetary policy proved unfounded today as it left its interest rate target at 0.25%. The Bank’s tone was gloomier than expected and its low inflation forecast supports our …
16th October 2016
Recent official activity data for the euro-zone have been fairly encouraging. Coupled with the unofficial survey evidence, they suggest that the region’s GDP growth might have maintained its pace or even picked up slightly in Q3. But it will still have …
14th October 2016
The euro-zone’s goods trade surplus rose in August, but it probably fell over Q3 as a whole. Looking ahead, we think that the trade surplus will narrow further this year as global demand growth remains fairly soft. … Euro-zone Trade …
The ECB’s Governing Council is unlikely to unveil any policy changes at its forthcoming meeting on 20th October. But we expect it to prepare the ground for an extension of its Asset Purchase Programme (APP) to be announced at its following meeting in …
13th October 2016
The sharp rise in euro-zone industrial production in August suggests that the sectorprovided a positive, albeit small, boost to GDP growth in Q3. However, industry isunlikely to be able to prevent the economic recovery from slowing in 2017. … Euro-zone …
12th October 2016
October’s rise in the ZEW Indicator of Economic Sentiment is broadly encouraging, although the index still points to a slowdown in German GDP growth. … German ZEW Survey …
11th October 2016
The European economy appears to have weathered the initial impact of the UK’s vote to leave the European Union reasonably well. However, the vote could yet have important indirect effects by fuelling euroscepticism elsewhere in the region and hence …
We think that the rise in government bond yields and slight appreciation of the euro after last week’sreports that the ECB is considering tapering its asset purchases were overdone. After all, in order totaper its purchases, it would first need to extend …
7th October 2016
Sharp rises in industrial production in Germany, France and Spain suggest that industry might contribute positively to euro-zone GDP growth in Q3. … German, French & Spanish Industrial Production …
There have been further signs of fiscal slippage in the peripheral economies this month. Germany is also planning a tax cut, but this does not mark a dramatic change in its fiscal stance. It intends to keep running balanced budgets and will maintain the …
The uncertainty surrounding capital account liberalisation suggests that the Central Bank of Iceland will keep interest rates unchanged for a while longer. But with inflationary pressures set to build, we think that the Bank will raise rates next year. … …
5th October 2016
The uncertainty surrounding capital account liberalisation suggests that the Central Bank of Icelandwill keep interest rates unchanged for a while longer. But with inflationary pressures set to build, wethink that the Bank will raise rates next year. … …
August’s data suggest that euro-zone retail sales growth picked up in Q3, whileSeptember’s Composite PMI implies that growth in the wider economy slowedonly slightly. But headline inflation will soon accelerate, weighing on growth. … Euro-zone Retail …
Recent activity indicators have provided mixed messages about euro-zone growth. The Composite PMI fell to an 18-month low in September, whereas the EC’s Economic Sentiment Indicator (ESI) reached a nine-month high. (See Chart.) There are some signs that …
4th October 2016
The euro-zone’s two main activity surveys have given conflicting evidence about the state of the economy at the end of the third quarter, with the Composite PMI apparently pointing to slowing GDP growth but the EC’s Economic Sentiment Indicator (ESI) …
30th September 2016
Headline inflation in the euro-zone has started to pick up as the effects of previous falls in energy prices fade. But with a large amount of slack in the labour market, underlying price pressures will remain subdued, meaning that pressure on the ECB to …
The consequences of a third election in Spain would be worse than those of earlier votes. And with Catalonia renewing its push for independence, politics represent a clear risk to the economic outlook. … Spanish economy could suffer from political …
29th September 2016
September’s rise in German inflation to +0.5% suggests that euro-zone inflation rose to a 23-month high in the same month. But in Germany at least, the rise reflected energy effects while underlying price pressures remained subdued. … German Flash CPI …
While the EC Business and Consumer Survey revealed a rise in sentiment in September, it still suggests that growth remains moderate and inflation expectations are weak. … EC Business & Consumer Survey …
Today’s relatively positive news about Deutsche Bank adds to the evidence that it is not the next Lehman Brothers for the global financial system and that its troubles are unlikely to trigger a German recession. But recent developments have highlighted …
28th September 2016
August’s money and credit data suggest that the euro-zone economy has continued to grow at a decent pace in Q3. Nevertheless, the data suggest that inflation will remain well below the ECB’s target. … Euro-zone Monetary Indicators Monitor …
27th September 2016
The Government confirmed today that the constitutional reform referendum will take place on 4thDecember. We think that a rejection of the reforms is a major risk to the economic outlook. … Italy’s constitutional referendum poses economic …
26th September 2016
September’s rebound in the German Ifo Business Climate Indicator (BCI) offered hope that the economy remains in good health after the more negative signs from other surveys and hard data. … German Ifo Survey …
The Bank of Japan’s announcement that it will replace its target for the monetary base with a 0% target for 10-year government bond yields has prompted speculation about whether the ECB might follow suit. But we think that this is unlikely. … ECB unlikely …
23rd September 2016
September’s fall in the euro-zone Composite PMI to a 20-month low implies that the already sluggish pace of expansion in the currency union lost further momentum at the end of the quarter. … Euro-zone Flash PMIs …
The Norges Bank left its key policy rate on hold today and signalled that no change was likely in the remainder of the year. But we think that more monetary loosening will be needed in 2017. … Norges Bank to cut interest rates to zero next …
22nd September 2016
The minutes of the Riksbank’s latest meeting revealed that at least half of the Executive Board thought that there is little need for the Bank to extend asset purchases beyond December. Indeed, increasing inflationary pressure could see the Bank raising …
21st September 2016
Rising inflation may be less of a drag on the growth of euro-zone household spending than we had previously feared. But spending growth is still likely to slow, weakening a key support for overall economic growth in the region. … Low inflation won’t …
19th September 2016
