Emerging Europe Economics Weekly Israel passed a budget, hawks in flight, Turkey déjà vu The Israeli budgets for 2021 and 2022 passed this week – the first approved budgets in three years – don’t make a big difference to the direction of fiscal policy, but contain key reforms that may... 5th November 2021 · 8 mins read
Europe Economics Weekly ECB pushes back as inflation pressures build ECB policymakers were out in force this week insisting that the Bank will not raise rates next year. We agree that they are very unlikely to do so, not least because we think the Bank’s inflation... 5th November 2021 · 5 mins read
Nordic & Swiss Economics Weekly Déjà vu at the SNB; labour shortages reach Greenland The renewed rise in the Swiss franc has lifted it back to territory that will ring alarm bells at the SNB, and the usual release of sight deposit data on Monday morning will indicate whether the Bank... 5th November 2021 · 5 mins read
China Economics Weekly Outbreak threatens growth, food panic overdone Our downbeat growth forecasts are largely based on expectations for a deepening downturn in construction and industry. But a worsening COVID-19 outbreak means the biggest near-term threat could be a... 5th November 2021 · 7 mins read
India Economics Weekly RBI liquidity measures, fuel tax cuts Recent measures by the RBI to further drain banking sector liquidity have led some to think that a hike in the reverse repo rate is imminent. But we disagree and think that liquidity-withdrawal... 5th November 2021 · 5 mins read
Middle East & North Africa Economics Weekly Egypt inflation, Saudi budget, Bahrain’s fiscal plan Rising wheat and gas prices have added to concerns about inflation in Egypt, raising the risk that the central bank fails to deliver the interest rate cuts that we currently anticipate next year... 4th November 2021 · 7 mins read
Emerging Europe Data Response Russia Consumer Prices (Oct.) The further rise in Russian inflation to 8.1% y/y last month paves the way for the central bank to hike the one-week repo rate by another 75bp (to 8.25%) when it meets in December. Note: We’re holding... 3rd November 2021 · 2 mins read
Europe Economics Update Upward revision to our Germany inflation forecast The recent surge in energy prices and worsening supply chain disruption will keep Germany’s inflation rate higher next year than we had anticipated. However, we still think inflation will fall from a... 3rd November 2021 · 4 mins read
Emerging Europe Data Response Turkey Consumer Prices (Oct.) Turkey’s headline inflation rate rose further in October to reach 19.9% y/y but the small drop in core inflation and political pressure on the central bank means that further interest rate cuts lie in... 3rd November 2021 · 2 mins read
Nordic & Swiss Data Response Switzerland CPI (Oct.) Inflation did surprise on the upside in Switzerland in October, but only by a trivial amount, leaving the headline rate at just over 1%. The market is pricing in an increase in policy rates to zero by... 2nd November 2021 · 2 mins read
Global Economics Focus Do inflation expectations matter? We have long been sceptical of the conventional view that inflation expectations have been an important determinant of inflation in advanced economies. At the same time, though, we doubt that... 1st November 2021 · 13 mins read
Europe Economics Weekly Investors unconvinced by ECB’s dovish message The ECB’s “soul searching” over inflation has made investors less, not more, convinced that the Bank will buck the hawkish trend elsewhere and keep policy rates on hold. We think investors have got... 29th October 2021 · 8 mins read
Emerging Europe Economics Weekly Turkey’s spat, Poland-EU dispute and the zloty A diplomatic spat between Turkey and its Western allies this week was quickly resolved, but it highlighted how vulnerable the lira is to geopolitical developments. And comments from Turkey’s central... 29th October 2021 · 9 mins read
Nordic & Swiss Economics Weekly Supply problems remain; Norges Bank to press on Sweden’s Q3 GDP data, published this week, were not as strong as they first appeared, and we expect supply problems to continue to weigh on activity there. The latest data for Switzerland suggest that... 29th October 2021 · 5 mins read
Australia & New Zealand Chart Pack Surging inflation puts pressure on monetary policy Trimmed mean inflation rose to 2.1% in Australia in Q3, the first time it has entered the RBA’s 2-3% target band since 2015. Even more strikingly, trimmed mean inflation in New Zealand rose to 4.4%... 29th October 2021 · 11 mins read
Europe Data Response Euro-zone Flash HICP (Oct.) Euro-zone inflation looks set to rise further before year-end as higher input costs continue to feed through. We agree with the ECB that the forces pushing inflation up should fade next year, and our... 29th October 2021 · 2 mins read
