Chief Economist's Note The five questions that will determine AI’s ultimate economic and market impact The financial press is full of hot takes about how AI will revolutionise our lives, for better or worse. They are fuelling an often-breathless debate around this emerging technology that can leave... 11th September 2023
Global Markets Update We expect a rally in government bonds in the US and Europe Market implied rates suggest that investors expect inflation to normalise in the US and Europe in the next couple of years. While we share that view, we think they are overestimating the level of... 8th September 2023 · 3 mins read
Europe Economics Weekly Recession risk looms over ECB meeting Christine Lagarde and her colleagues will have some new and gloomy data releases to contemplate when they gather in Frankfurt next week. Indeed, the euro-zone economy looks likely to be slipping into... 8th September 2023 · 7 mins read
ECB Watch One last rate hike... After a run of rather predictable meetings during the past few months, next week’s monetary policy meeting looks set to be finely balanced. We think another 25bp rate hike is the most likely outcome... 7th September 2023 · 8 mins read
Europe Economics Update Falling inflation no guarantee of higher consumption We think that the positive impact of lower inflation on households’ real incomes in the coming quarters will be offset by weaker employment and nominal wage growth. As a result, we don’t think that... 7th September 2023 · 3 mins read
Event Drop-In: Unpacking the Fed, ECB and Bank of England September decisions 1695304800 Will the FOMC’s September meeting confirm that the Fed is done with tightening? Will the ECB and Bank of England take rates higher?
Europe Rapid Response Euro-zone GDP and Employment (Q2) The downward revision to the euro-zone’s second-quarter GDP data means the economy is now thought to have essentially flat-lined since the fourth quarter of last year. With business surveys having... 7th September 2023 · 2 mins read
Europe Rapid Response German Industrial Production (July) Aggregate German industrial output fell sharply again in July and the fall was even larger if the construction and energy sectors are excluded. We expect production to drop further in the rest of the... 7th September 2023 · 2 mins read
Europe Economics Update Spain and Italy hit harder by ECB rate hikes The higher share of floating rate mortgages in Italy and Spain means that household interest spending in both countries has risen much further than in Germany and France. Interest spending is also set... 6th September 2023 · 3 mins read
Europe Commercial Property Update Why the slump in values feels different this time The latest real estate data suggest that the current drop in capital values in the euro-zone will be as bad as the post-GFC correction. But market sentiment has been less negative this time... 6th September 2023 · 3 mins read
Europe Economics Update German fiscal policy to remain looser than pre-Covid The German government is unlikely to announce the kind of big stimulus package that some are calling for. However, fiscal policy will remain much more supportive than it was before the pandemic. 6th September 2023 · 4 mins read
Europe Rapid Response Euro-zone Retail Sales (July 2023) Euro-zone retail sales fell in July and, in our view, will keep declining over the rest of the year as the effects of tighter monetary policy continue to feed through to consumers. 6th September 2023 · 2 mins read
Europe Rapid Response Euro-zone Final PMIs (August 2023) The final PMIs published today were revised down from the already-low levels reported in the flash measure two weeks ago. The Services Business Activity PMI slumped compared to July, and although the... 5th September 2023 · 2 mins read
Europe Economics Weekly Weaker economy, lower inflation Data released this week are consistent with our view that euro-zone core inflation has passed its peak and that the economy will contract in Q3. And July’s euro-zone retail sales and German industrial... 1st September 2023 · 9 mins read
Europe Economics Update Repayment of €2.2trn TLTROs to have little impact The repayment of ECB TLTROs by banks has gone smoothly so far and we expect the rest of the TLTROs to be repaid by the end of 2024 without significantly affecting financial conditions or interest... 31st August 2023 · 4 mins read
Europe Commercial Property Update Euro-zone crash now expected to match GFC slump While the macro backdrop was broadly unchanged, rents were stronger and yields were higher than expected in Q2, forcing us to re-examine our 2023 real estate view. As a result, we have edged down our... 31st August 2023 · 3 mins read
