Europe Economics Delta variant won’t derail the euro-zone’s recovery The Delta variant does not appear to have taken hold in mainland Europe as yet, but the experience of the Alpha variety suggests that it could be dominant by the end of July. While this would be far... 16th June 2021 · 3 mins read
Europe Data Response Euro-zone Hourly Labour Costs (Q1) Average hourly labour cost growth slowed in Q1, and we expect wage growth to remain subdued over the coming years. This will keep underlying inflationary pressures down. 16th June 2021 · 2 mins read
Europe Economics Update Is the ECB over-optimistic on growth? The ECB made significant upward revisions to its GDP forecasts last week, presumably encouraged by the recent experience of other economies. The Bank also seems to have come round to our view that the... 15th June 2021 · 4 mins read
Europe Data Response Euro-zone Industrial Production (Apr.) The further rise in euro-zone industrial production in April suggests that the sector is continuing to recover. Supply disruptions look set to drag on for a while yet, constraining the sector’s... 14th June 2021 · 2 mins read
Europe Economics Weekly Growth outlook improving, but ECB too optimistic The euro-zone’s growth outlook is improving thanks to the acceleration in the vaccine rollout and the re-opening of the economy. However, we were surprised at the size of the upward revision to the... 11th June 2021 · 6 mins read
Emerging Europe Economics Update We now forecast major CEE currencies to outperform the euro We now expect interest rates to rise across Central and Eastern Europe in the coming years and for all the major currencies to strengthen against the euro, with the Czech koruna and Polish zloty... 10th June 2021 · 3 mins read
Europe Economics Update Not tapering yet, despite chunky forecast upgrades Having left the pace of its PEPP purchases unchanged and made big upgrades to its GDP forecasts, we think the ECB will start to taper the PEPP later this year. But we think it will eventually make an... 10th June 2021 · 3 mins read
Capital Daily Inflation, monetary policy and the outlook for US & E-Z yields Despite the limited market reaction to today’s higher-than expected US CPI print, we still think that the yield of US 10-year Treasuries will rise this year as high inflation proves persistent. We... 10th June 2021 · 6 mins read
Europe Economics Focus Labour market recovery won’t spark wage spiral We estimate that the spare capacity in the euro-zone’s labour market has increased by around four million people, or 2.5% of the labour force, since the start of the pandemic. This is likely to... 9th June 2021 · 20 mins read
Europe Data Response Euro-zone GDP & Employment (Q1) Euro-zone GDP fell in Q1 and official data for April have been weak, but timelier data suggest that the recovery is now underway. We have pencilled in a 1% q/q rise in GDP in Q2, with risks to the... 8th June 2021 · 2 mins read
Europe Chart Pack Springing back to life…again The economic outlook has brightened as the virus has subsided and governments have permitted people to return to the shops and restaurants as well as to travel a bit more freely. However... 4th June 2021 · 12 mins read
Europe Economics Weekly ECB likely to look through rising inflation May’s inflation data were a little stronger than we and the consensus had expected, and inflation looks set to keep rising in the second half of the year. At next week's ECB meeting, we think that... 4th June 2021 · 5 mins read
Europe Data Response Euro-zone Retail Sales (Apr.) Euro-zone retail sales fell back again in April to below their pre-pandemic levels. But the re-opening of non-essential retail throughout much of the euro-zone in May means they will have improved... 4th June 2021 · 2 mins read
Europe Economics Update Euro-zone wage pressures will prove limited There are some signs of labour shortages developing in parts of the euro-zone, notably in hospitality. But they are likely to be short-lived and will not put sustained upward pressure on wages. And... 3rd June 2021 · 4 mins read
ECB Watch Preparing the ground for a super-dovish taper We think the ECB will tweak its monetary policy statement next week by pledging to maintain favourable financing conditions but not renewing its pledge to keep PEPP purchases at the recent... 3rd June 2021 · 8 mins read
Europe Commercial Property Update Consensus catching up to the view of a weak recovery The latest IPF Consensus forecasts are consistent with our view that prime office rents will fall this year and the recovery in 2022 will be weak, even as the easing of virus restrictions allows... 3rd June 2021 · 3 mins read
