Nordic & Swiss Economics Weekly “Rate hike” Olsen to bow out with a whimper Norges Bank Governor Olsen has presided over more rate hikes (seven) than any other G10 bank head since he took the role in January 2011. But with the Bank set to leave rates on hold at his last... 14th January 2022 · 4 mins read
Europe Economics Weekly Euro-zone GDP barely grew in Q4, inflation risks rise Data released this week suggest that our assumption that euro-zone GDP rose by 0.2% in Q4 could be too optimistic, but we still think that the economy will grow in Q1. Meanwhile, rapid house price... 14th January 2022 · 5 mins read
UK Commercial Property Update Which assets can provide the best inflation protection? Recent data have reinforced concerns about inflation risks in the UK. We remain of the view that property investments provide only limited long-term protection against higher prices, but of the... 14th January 2022 · 3 mins read
Europe Data Response German GDP (2021) Provisional data showing that Germany’s GDP increased by 2.7% last year and news that it shrank in Q4 underlines that its recovery has lagged many of its peers, including the US, France and the UK. We... 14th January 2022 · 3 mins read
Nordic & Swiss Data Response Sweden Consumer Prices (Dec.) The increase in Swedish CPIF inflation in December will embolden the hawks at the Riksbank. While we expect energy effects will drop out this year, continued supply-chain problems and rising inflation... 14th January 2022 · 2 mins read
UK Economics GDP & International Trade (Nov.) Although the effects of the Omicron COVID-19 wave will probably mean that the economy falls back below its pre-pandemic peak by January after having surpassed it for the first time in November, that... 14th January 2022 · 4 mins read
Nordic & Swiss Central Bank Watch Norges Bank to take pause, as Olsen bows out Norwegian policymakers will keep interest rates on hold, at +0.50%, next Thursday, before resuming their tightening cycle in March. We forecast one rate hike per quarter this year, which is one more... 13th January 2022 · 5 mins read
FX Markets Update The outlook for high-beta DM currencies in 2022 We think that rate differentials and commodity prices will be the key factors driving the relative performance of six “high-beta” DM currencies in 2022, continuing last year’s trend. We expect all... 13th January 2022 · 4 mins read
UK Commercial Property Data Response Credit Conditions Survey (Q4 2021) The Q4 credit conditions survey suggests that, while credit conditions will remain loose, scope for lenders to absorb further increases in interest rates into their margins has run out. Drop-In: Neil... 13th January 2022 · 3 mins read
Nordic & Swiss Economics Update Riksbank to join tightening crowd later this year We expect policymakers in Denmark and Switzerland to match the 50bps of interest rate hikes that we now forecast in the euro-zone next year. And against the backdrop of rising global interest rates... 13th January 2022 · 3 mins read
Asset Allocation Update EM equities may continue to underperform in 2022-23 We think that emerging market (EM) equities will continue to underperform their developed market (DM) peers over the next couple of years, even if that underperformance is far less stark than it was... 13th January 2022 · 5 mins read
Emerging Europe Data Response Russia Consumer Prices (Dec.) Russian inflation held steady at 8.4% y/y in December, but we think it will rise a bit further this month and prompt the central bank to deliver a final 75bp rate hike, to 9.25%, at its meeting next... 12th January 2022 · 2 mins read
Europe Economics Update ECB likely to raise rates to zero in 2023 With pandemic-related inflationary pressures proving a bit more intense and persistent than we had anticipated, and policymakers sounding more willing to tighten policy, we think the ECB is most... 12th January 2022 · 3 mins read
UK Economics Inflation won’t be the fiscal boon many assume While the general perception is that higher inflation is unambiguously good for the public finances, the reality is a bit more nuanced. The Chancellor will almost certainly be gifted with a lower... 12th January 2022 · 4 mins read
Europe Data Response Euro-zone Industrial Production (Nov.) November’s 2.3% monthly increase in euro-zone industrial production followed a big downward revision to October’s figures and was largely due to huge volatility in Ireland. The big picture is that... 12th January 2022 · 2 mins read
Europe Economics Update Rate hikes might not spell the end of ECB QE We doubt that “fiscal dominance” – worries about the impact of higher interest rates on debt sustainability – would stop the ECB from raising interest rates. But it might encourage the Bank to... 11th January 2022 · 3 mins read
