Europe Economics Update Italy’s public finances still a cause for concern After a period of relative calm, Italy’s fragile public finances are likely to come under the spotlight again before long. Budget deficits will be much higher than the latest government projections... 10th April 2024 · 4 mins read
Europe Rapid Response Germany State CPI (Mar.) The fall in CPI inflation in the major German states in March all but confirms that both German and euro-zone HICP inflation will come in lower than expected in March. This will please ECB... 2nd April 2024 · 2 mins read
Global Markets Update Euro-zone sovereign spreads may have limited scope to fall We expect the spreads between the yield of the 10-year German bund and its ‘riskier’ counterparts in other euro-zone economies to narrow only a little further this year. If anything, we think that the... 27th March 2024 · 5 mins read
Capital Daily What might move euro-zone bond yields now? We doubt that ECB policy will have much impact on German bond yields this year and next – if anything, risks are skewed to the upside. But the outlook may be a bit brighter for Italian bonds, and we... 7th March 2024 · 5 mins read
Long Run Economic Outlook AI productivity boom tempered by protectionist threat The AI revolution should deliver substantial productivity gains in the coming decade, particularly in advanced economies. But with working age populations falling in key areas and China’s economy in... 20th February 2024 · 1 hr, 9 mins read
Europe Economics Update Construction weakness to resume Euro-zone construction output picked up in December, but remained well below last year’s peak. We expect it to drop again in 2024, in part due to a continued dismal performance by the sector in... 20th February 2024 · 3 mins read
Global Economics Focus Have we reached the end of the housing correction? Housing markets in developed economies have perplexed forecasters since 2019. The boom in prices in 2020-22 was not anticipated, and the fall in prices since has been smaller than expected. In this... 14th February 2024 · 17 mins read
Europe Economics Focus Euro-zone set for years of austerity-lite After years of fiscal largesse, austerity is back. We suspect that budget cuts will reduce euro-zone GDP growth by only around 0.1 or 0.2 percentage points per year over the next five years. But the... 1st February 2024 · 15 mins read
Europe Commercial Property Update Italy retail rent growth to slow, but continues to lead The surge in Italian prime retail rents over the past year is likely to give way in 2024, as inflation falls back and consumer spending stagnates. But the strong fundamentals that have supported this... 10th January 2024 · 3 mins read
Europe Economics Focus Debt burdens will constrain fiscal policy for years The goal of keeping government debt ratios stable or falling means that many euro-zone countries will need to tighten fiscal policy substantially and some will need to run primary budget surpluses for... 19th December 2023 · 16 mins read
Global Markets Update Fiscal health and the outlook for the euro-zone’s bond markets We continue to forecast a small fall in euro-zone yield spreads over Bunds in the next year or so. However, rising risks to the upside in recent months and differences in fiscal positions between... 22nd November 2023 · 5 mins read
Europe Commercial Property Update Milan office yield looks unsustainable Milan prime office yields appear very low both compared to other alternative assets and other euro-zone countries. By any standards, office property there looks highly overvalued. But looking ahead... 20th November 2023 · 4 mins read
Europe Economics Update Will Italian households save the day? Italian households have been the main net purchasers of Italian government bonds recently and we suspect that they will buy a lot more in the coming months. However, the sustainability of Italy’s debt... 7th November 2023 · 4 mins read
Europe Economics Weekly ECB rate cuts still a long way off, fiscal rules debate This week’s comments by ECB officials, as well as signs that underlying inflationary pressures in the euro-zone remain strong, support our view that the first ECB rate cut will only come in the second... 3rd November 2023 · 8 mins read
Europe Economics Focus High bond yields to push up Italy’s debt ratio to 150% The prospect of a long period of high bond yields and some signs of fiscal slippage by Prime Minister Meloni’s government have worsened the outlook for public finances in Italy. We now think the debt... 1st November 2023 · 19 mins read
