Europe Economics Update ECB response highlights EZ policy weakness The measures unveiled by the ECB today were as substantial as expected. But, along with Ms Lagarde’s comments, they underlined that the ECB has little firepower left, that there has been no... 12th March 2020 · 3 mins read
Europe Economics Update How big a risk is Covid-19 to euro-zone banks? The coronavirus poses a significant risk to euro-zone banks. Based on our current forecast for a 1% or so decline in GDP this year, loan losses would be manageable. But a much deeper recession may... 11th March 2020 · 4 mins read
Europe Economics Update Which EZ economies will the coronavirus hit hardest? The spread of the coronavirus to Europe means that it is household spending and tourism that are likely to be hardest hit in the coming months, rather supply chains and exports, which initially... 10th March 2020 · 2 mins read
Europe Economics Update EZ heading for a sharp but (probably) short recession In the current circumstances, any economic forecasts come with a huge pinch of salt. But we now think the euro-zone economy will experience a deep slump in Q2 this year, causing GDP to decline by more... 10th March 2020 · 6 mins read
Europe Economics Weekly Policy response will only cushion the blow The market slump will galvanise policymakers into action. The situation is evolving quickly but we now think there will be a fiscal stimulus of at least 1% of GDP in the euro-zone this year, and... 6th March 2020 · 6 mins read
Europe Data Response Euro-zone Retail Sales (Jan.) & Final PMIs (Feb.) The increase in euro-zone retail sales data in January suggests that household consumption picked up at the beginning of the year, but we suspect that spending will drop in Q2 as the Covid-19 virus... 4th March 2020 · 2 mins read
ECB Watch ECB virus response likely to include a rate cut The ECB will need to respond to the Covid-19 virus, which has already prompted a 50bp rate cut by the Fed, but we think it will do so on its own terms. This is likely to include a 10bp deposit rate... 3rd March 2020 · 8 mins read
Europe Data Response Euro-zone Flash CPI (Feb.) & Unemployment (Jan.) February’s fall in inflation reflected the decline in energy prices as a result of the coronavirus outbreak. But if the virus starts to sap domestic demand, then core inflation may decline slightly in... 3rd March 2020 · 2 mins read
Europe Economics Update Euro-zone GDP to contract in Q2 and perhaps beyond Following the surge in Covid-19 cases over the past week, we are cutting our forecast for euro-zone economic growth to 0.5% for the year, from 0.7% previously, due to a sharp drop in household... 2nd March 2020 · 3 mins read
Europe Economics Weekly Household spending to be hit by the virus The ten-fold increase in confirmed coronavirus cases and slump in equity prices over the past week has increased the risk of a recession. We would not be surprised if the ECB issues an official... 28th February 2020 · 8 mins read
Europe Data Response EC Business and Consumer Survey (Feb.) The rise in the euro-zone Economic Sentiment Indicator (ESI) for February adds to the evidence that the coronavirus has had little impact on the economy so far. But the survey was conducted before the... 27th February 2020 · 2 mins read
Europe Economics Weekly Surveys do little to dispel gloomy outlook The economic surveys this week suggested that the euro-zone economy held up better in the face of the coronavirus than had been feared. But the detail of the PMIs still showed that the virus had taken... 21st February 2020 · 7 mins read
Europe Commercial Property Chart Pack Further slowdown in capital value growth ahead Although euro-zone rental value growth slowed in 2019, further falls in property yields supported capital values. Despite the soft economic backdrop, capital value growth should hold up in coming... 21st February 2020 · 9 mins read
Europe Data Response Euro-zone Flash PMIs (Feb.) The unexpected rise in the euro-zone Composite PMI in February will have assuaged fears that the region’s economy has been adversely affected by supply-chain disruption as a result of the coronavirus... 21st February 2020 · 3 mins read
Europe Economics Update ECB’s more positive outlook won’t have lasted long The account of the ECB’s January meeting suggests that the ECB was becoming a little more positive on the economic outlook. But weak data and the spread of the coronavirus since then will have surely... 20th February 2020 · 3 mins read
Europe Economics Weekly ECB on hold until later this year The recent economic data have continued to be weak, and ECB policymakers seem more united behind their current “unconventional” policy than they were last year. However, we see no chance of further... 14th February 2020 · 6 mins read
