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The slowdown in Swedish GDP growth in Q1 came as little surprise after its sharp rise in Q4. But although the economy is still expanding, the breakdown was less than encouraging. Together with the still-low level of inflation, this suggests that the …
29th May 2015
The Riksbank’s third round of government bond buying got underway today. But we doubt that the programme will be enough to prevent the krona from appreciating and thereby depressing inflation. … Riksbank policy easing will need to be more …
21st May 2015
Q1’s GDP data showed that the decline in oil prices hit the economy fairly hard. While policymakers have the tools to prevent a more severe downturn, growth is likely to remain slow by past standards. … Norwegian GDP (Q1 …
20th May 2015
Iceland’s healthy economic recovery after its financial collapse in 2008 highlights the attractions of currency depreciation, if necessary accompanied by capital controls. Such a path has its economic costs, but Greek policymakers might consider them a …
13th May 2015
Although Iceland’s central bank left its main interest rates on hold today, it adopted a much more hawkish tone, signalling that it was likely to start hiking rates as early as next month. … Sedlabanki holds, but interest rates to rise …
The renewed fall in Sweden’s headline inflation rate in April suggests that the Riksbank’s policy easing so far has not eradicated the threat that deflation becomes entrenched. Accordingly, further measures will be needed. … Swedish Consumer Prices (Apr. …
12th May 2015
The new coalition government is likely to impose significant budget cuts that would drag on Finland’s already ailing economy. But there are reasons to think that fiscal consolidation might be less of a constraint on growth than it has been over the past …
8th May 2015
Sweden’s Riksbank stepped up its fight against deflation by more than doubling the size of its government bond purchase programme and reiterating its willingness to make monetary policy even more expansionary. We still think that the Riksbank will have to …
29th April 2015
Sweden’s headline inflation rate picked up further in March. But with inflation likely to remain well below target and the underlying rate unchanged, we continue to think that the Riksbank will cut rates further at its late-April meeting. … Swedish …
14th April 2015
The opposition Centre Party looks likely to be the largest party in a coalition government after Finland’s general election on 19th April. But the outcome of the election is unlikely to have a major impact on the economic outlook. Most of the major …
13th April 2015
The Swiss National Bank’s decision to leave its deposit rate at -0.75% presumably reflects the slight softening of the franc over recent weeks. But we expect renewed upward pressure on the currency to lead it to cut rates and intervene in foreign exchange …
19th March 2015
The Swedish Riksbank unexpectedly loosened monetary policy further today, citing the deflationary risks from the stronger krona, and said it was prepared to do more if needed. With the ECB’s QE likely to push the krona up against the euro even further, we …
18th March 2015
Iceland’s central bank left its main interest rates on hold today as it waits to judge the outcome of the ongoing wage negotiations. But with labour market tensions growing and the Sedlabanki raising its 2015 GDP forecasts, we think that the next move in …
Sweden’s headline inflation rate turned positive in February for the first time in eight months. But deflationary pressures have not disappeared altogether and we continue to think that the Riksbank will need to take additional action in April. … Swedish …
11th March 2015
Iceland’s economy continued to expand in Q4, suggesting that the country remains well on the road to recovery. … Iceland GDP (Q4 14) …
10th March 2015
The Swiss economy posted another healthy expansion in Q4, with both net exports and domestic demand continuing to rise. But the franc’s surge since then may well see the economy back in recession before long. … Swiss GDP (Q4 …
3rd March 2015
The unexpected surge in Swedish GDP in Q4 confirms that the economy is recovering at a solid pace and reduces the chances of a Japanese-style period of stagnation. But with prices continuing to fall, the Riksbank will still need to do more. … Swedish & …
27th February 2015
The recent sharp drop in the Danish krone back to its central rate against the euro suggests that the Danish Nationalbank has been successful in preserving its currency peg. But the upward pressure on the krone has not disappeared and we think that the …
25th February 2015
The unexpected rise in Sweden’s headline inflation rate in January will be welcomed by the Riksbank but with prices still falling on an annual basis, we think the central bank will need to cut the repo rate further and increase its asset purchase …
17th February 2015
The Swedish Riksbank today became the latest central bank to respond to the threat of persistent deflation by pushing interest rates into negative territory and launching a quantitative easing programme. We suspect it will have to do more. … Swedish …
12th February 2015
Q4’s solid gain in mainland GDP maintained Norway’s position as the strongest of the Nordic economies. But the ongoing effects of the fall in oil prices are likely to depress growth further over the coming quarters, probably prompting further monetary …
11th February 2015
January’s falls in Swiss and Danish CPI inflation into or further into negative territory highlight the need for central banks to do more to prevent their respective currencies appreciating further and tackle the threat of a long and damaging bout of …
10th February 2015
The viability of Denmark’s currency peg with the euro has been called into question following the Swiss National Bank’s decision to abandon its exchange rate ceiling. We think that the Danish peg will ultimately hold but that the Danish Nationalbank will …
21st January 2015
The Swiss National Bank’s (SNB) shock decision to abandon its ceiling for the franc reflected its judgement that the policy was just not sustainable. Unless it can reverse the franc’s appreciation with other policies, the downward impact on growth and …
15th January 2015
The fall in Sweden’s headline inflation rate in December was smaller than expected but it is unlikely to alleviate the pressure on the Riksbank to take bolder action to boost inflation. … Swedish CPI (Dec. …
13th January 2015
Sweden’s central bank today pushed back the date at which it expects to raise its policy rate from zero and revealed that it was preparing unconventional measures to make policy even more expansionary. We think that these may well include a programme of …
16th December 2014
While the Swiss National Bank (SNB) left policy on hold today, it reaffirmed its “utmost determination” to defend its ceiling for the franc exchange rate. It may introduce a negative interest rate to help with this, but the key policy tool will continue …
11th December 2014
The renewed fall in Sweden’s headline inflation rate in November will maintain the pressure on the Riksbank to push back the date at which it first expects to raise rates from the middle of 2016 when it meets next week. … Swedish CPI (Nov. …
Iceland’s economy rebounded in Q3 after contracting for two consecutive quarters, led by a surge in investment. Although the quarterly data are very volatile, this expansion suggests that Iceland is continuing to recover gradually. … Iceland GDP (Q3 …
5th December 2014
Q3’s Swiss GDP figures suggested that the economy is still holding up well against the twin pressures of euro-zone weakness and the strong franc. But the Swiss National Bank may have more work to do to protect its currency ceiling and head off deflation. …
3rd December 2014
The new Swedish Government lost a key parliamentary vote on its Budget today, throwing politics in the country into turmoil and raising the possibility of fresh elections. But the potential upheaval poses less of a risk to the Swedish economy than does …
The likely introduction of “full-blown” quantitative easing by the ECB may well put pressure on other European central banks to follow suit and introduce their own unconventional measures in order to curb the appreciation of their currencies, protect …
1st December 2014
The rise in Swedish GDP in Q3 provides further evidence of a steady recovery and will help to alleviate fears of a Japanese-style bout of deflation and stagnation. But growth is not strong enough for policymakers to be complacent about deflation risks. … …
28th November 2014
Q3’s reasonably solid gain in GDP maintained Norway’s position as the strongest of the Nordic economies. But signs of weaker household spending and the likely negative effects of lower oil prices point to slower growth ahead. … Norwegian GDP (Q3 …
20th November 2014
Norway has been one of the strongest growing economies of the developed world over the last decade. But with households buckling under high debt burdens and lower oil prices set to exacerbate the decline of the energy sector, a weaker growth path lies …
The rise in Sweden’s headline inflation rate in October will do little to dispel fears that the country is succumbing to a damaging bout of deflation and will maintain pressure on the Riksbank to consider unconventional monetary policy measures. … Swedish …
11th November 2014
Fears that a referendum over the Swiss National Bank’s (SNB’s) gold holdings might prevent the Bank defending its ceiling for the Swiss franc may be overblown. But the referendum highlights political opposition to the SNB’s aggressive balance sheet …
4th November 2014
Sweden’s central bank today stepped up its fight against deflation, cutting its main policy rate to a record low of 0% and pushing back the date at which it first expects to raise rates. We think that the Riksbank may well need to resort to currency …
28th October 2014
Finland’s dismal post-crisis economic performance is at odds with the ongoing recoveries of its Nordic neighbours. Although these countries share many characteristics, Finland’s economic decline has been caused by a combination of drivers that is specific …
25th September 2014
Iceland’s economy contracted in Q2 for the third consecutive quarter, raising questions over the sustainability of the economic recovery. But there are still reasons to believe that its economy will continue to improve steadily. … Iceland GDP (Q2 …
19th September 2014
Sweden’s general election yesterday resulted in defeat for the centre-right coalition Alliance Government after two terms in power but produced no overall majority for the centre-left opposition parties. While this will fuel political uncertainty in the …
15th September 2014
The ECB’s unexpected announcement last week that it would lower interest rates again forced the Danish central bank to reinstate a negative deposit rate to protect the Danish krone’s peg to the euro. But with the ECB likely to take the plunge into …
10th September 2014
Sweden’s central bank today left its main policy rate on hold at 0.25% and reiterated that interestrates would not start to rise until late 2015 as it continues its fight to stave off deflation. But wethink that the date of the first rate hike will still …
4th September 2014
Switzerland’s economy unexpectedly stagnated in Q2, suggesting that it is feeling the effects of weakness in the euro-zone, its major trading partner. … Swiss GDP (Q2 …
2nd September 2014
The Danish economy unexpectedly contracted in Q2 as a result of a sharp fall in exports, suggesting that Denmark is feeling the effects of the slowdown in its biggest trading partner, the euro-zone. … Danish GDP (Q2 …
29th August 2014
Q2’s sharp rise in Norwegian GDP made imminent policy action by the Norges Bank look very unlikely. But we still expect the Bank to cut interest rates next year as the krone strengthens further and the recovery slows. … Norwegian GDP (Q2 …
21st August 2014
Iceland’s central bank kept its main interest rate unchanged at 6% at its meeting today but hinted strongly that rates will need to rise soon. We continue to think that the Sedlabanki will raise the policy rate before the end of the year as the slack in …
20th August 2014
Recent Norwegian economic data suggest that a September rate cut is less likely than we had previously thought. But we still think the Norges Bank will cut its key policy rate, currently at 1.5%, by the end of the year with a further cut following early …
19th August 2014
The provisional estimate of Swedish Q2 GDP revealed a disappointingly weak pace of growth. But domestic demand remains reassuringly strong, suggesting that the economic recovery will remain on track. … Swedish GDP (Q2 14, …
30th July 2014
