UK Economics New higher inflation forecasts and lower GDP forecasts In response to the news that the US is considering banning imports of Russian oil, which means that commodity prices will probably be higher for longer, we have raised our CPI inflation forecast and... 7th March 2022 · 6 mins read
Global Economics Update The consequences of an end to Russian energy trade We think that a complete ban on Russian energy imports would cause the prices of Brent crude oil and European natural gas to surge to $160pb and €300/MWh in the near term and settle at still very high... 7th March 2022 · 6 mins read
UK Economics Flattening gilt yield curve another signal of weaker growth The 10-year/2-year gilt yield curve is closer to inverting than at any point since March 2020, supporting our view that GDP growth will slow this year. And while a yield curve inversion isn’t a good... 7th March 2022 · 3 mins read
UK Housing Market Data Response Halifax House Prices (Feb.) The gain in house prices reported by Halifax for February pushed the annual rate to 10.8%, its highest since June 2007. With new supply limited and mortgage rates still relatively low, we suspect that... 7th March 2022 · 2 mins read
Europe Chart Pack Ukraine war stokes inflation, reduces growth The war in Ukraine has prompted us to revise our forecasts for euro-zone GDP, inflation and monetary policy. Russia’s downturn in 2015 had no obvious impact on euro-zone GDP and Russia has become less... 4th March 2022 · 12 mins read
Commodities Weekly Prices could rise further Although many commodity prices are already back to levels last seen in 2008, there is still scope for prices to rise further if Western sanctions are extended to cover energy commodities. (At the end... 4th March 2022 · 6 mins read
Emerging Europe Economics Weekly Russia plunges into economic & financial turmoil Russia has fallen into chaos and we’ll get a clearer sense next week of the impact that sanctions are having on the economy. A dollar bond repayment by Gazprom on Monday will be a litmus test of the... 4th March 2022 · 7 mins read
FX Markets Chart Pack The Russia-Ukraine war and currency markets The dollar has generally strengthened since Russia’s invasion of Ukraine, while European currencies have generally been the hardest hit by the war. But unlike in most risk-off episodes, the currencies... 4th March 2022 · 6 mins read
UK Economics One week on, how has the war in Ukraine moved the dial? The further escalation of the war in Ukraine this week, which resulted in tighter economic sanctions on Russia and renewed surges in commodity prices, has increased the upside risks to inflation and... 4th March 2022 · 7 mins read
Nordic & Swiss Economics Weekly Finland exposed; Swiss franc on cusp of euro parity As we argued only last week, the SNB has so far been willing to let the franc rise against the euro. However, policymakers’ tolerance would surely be tested if the franc were to push through the... 4th March 2022 · 4 mins read
Europe Economics Weekly Revising down our euro-zone GDP forecasts The ratcheting-up of sanctions on Russia and the further surge in commodity prices this week mean we are revising down our euro-zone growth forecast for 2022. Exports to Russia will collapse while... 4th March 2022 · 6 mins read
UK Commercial Property Data Response IHS Markit/CIPS Construction PMI (Feb.) The construction PMI rose to its highest level in eleven months in February. Although encouraging, supply constraints remain a major impediment and input costs high, which we think will limit growth... 4th March 2022 · 2 mins read
Europe Data Response Retail Sales (Jan.) The small rise in retail sales in January, after a steep fall in December, suggests that Omicron remained a drag on consumption. Although spending will have rebounded in February, higher energy prices... 4th March 2022 · 2 mins read
Precious Metals Update Sanctions are the catalyst for palladium price gains The constraints on Russian supply will work in tandem with an improving demand-side picture from auto production to keep palladium prices elevated. As a result, we have revised up our price forecasts... 4th March 2022 · 2 mins read
Europe Economics Ukraine war puts ECB plans on hold At next week’s monetary policy meeting, the Governing Council will stress that it will ensure banks have ample liquidity and that financial stability will be preserved while implementing EU sanctions... 3rd March 2022 · 8 mins read
Europe Economics Update Ukraine war to keep fiscal stance loose for longer The EU’s decision to suspend its debt reduction rule for another year gives countries the green light to ramp up spending on defence and cushion the blow from higher energy prices. Depending on how... 3rd March 2022 · 4 mins read
