Europe Economic Outlook Stagflation to drag on, rates near peak We expect the mild recession in the euro-zone to drag on for the rest of the year. The drop-back in energy prices will provide some relief for households and companies but will be partly offset by... 21st June 2023 · 32 mins read
Europe Economics Update When will the ECB cut rates? History suggests that in the absence of a major financial shock, European central banks usually leave interest rates at their peak for a year or more. That’s consistent with our view that the ECB is... 24th May 2023 · 4 mins read
Europe Economics Update EZ labour supply holding up relatively well The aggregate supply of labour in the euro-zone has recovered comparatively well from the pandemic, albeit with big differences between the major economies. But despite this, the labour market is very... 18th May 2023 · 4 mins read
Europe Economics Update Italian debt sustainability revisited Our central scenario is that Italy’s public debt-to-GDP ratio will decline gradually in the long-run. However, the government will need to maintain sizeable primary budget surpluses to make that... 5th May 2023 · 3 mins read
Europe Economics Weekly Outlook beyond Q1 bleak, more Italy energy support The latest survey and activity data suggest that, after stagnating in Q4, euro-zone GDP returned to growth in the first quarter. But a recession in the remainder of 2023 still seems likely to us... 6th April 2023 · 6 mins read
Europe Data Response Euro-zone Final PMIs (Mar.) March’s PMIs suggest that the economy expanded in Q1. They also point to further gains in employment and strong price pressures. With the turmoil in the banking sector having stabilised, this makes us... 5th April 2023 · 2 mins read
Europe Economic Outlook ECB to keep policy tight despite recession The euro-zone economy is set to perform much worse than consensus forecasts suggest over the next two years, with a recession looking likely. That is mainly because monetary policy and bank lending... 28th March 2023 · 27 mins read
Europe Commercial Property Update More pain ahead for Italian industrial The Italian industrial market saw its sharpest fall in capital values on record last year, owing to a surge in yields in Q4. But with valuations still stretched and investor demand weakening, we think... 9th March 2023 · 3 mins read
Europe Economic Outlook Recession will do little to dampen price pressures We think the euro-zone is now at the start of a recession, driven by high inflation, tightening financial conditions and weak external demand, and anticipate two quarters of contraction followed by a... 19th December 2022 · 2 mins read
Europe Data Response EZ Retail Sales (Oct.) & Final PMIs (Nov.) The sharp drop in euro-zone retail spending in October is consistent with our view that – notwithstanding the slight uptick in some business surveys recently – the economy is entering recession. With... 5th December 2022 · 2 mins read
Europe Commercial Property Update Italian prime office rents to fall next year The sharp fall in employment we expect next year will drag on Italian office rents. While prime rents should hold up better than the wider market as the shift to the best quality space continues, we... 29th November 2022 · 3 mins read
Europe Economics Update Italy: budget hurdle cleared, but debt risks remain Italy’s draft 2023 budget confirms that, for now, the new right-wing government is committed to fiscal responsibility. As a result, the risk of turbulence in BTP markets has fallen, but it remains... 22nd November 2022 · 3 mins read
Capital Daily What next for BTPs? It might seem surprising that the spread between the yields of 10-year government bonds in debt-laden Italy and Germany has plummeted by more than 50bp over the past month or so, to <190bp, given the... 18th November 2022 · 7 mins read
Europe Data Response Euro-zone Final PMIs (Oct.) The final euro-zone PMIs for October paint a clear picture of falling activity and sky-high inflation. We expect the ECB to prioritise the fight against inflation and press on with raising the deposit... 4th November 2022 · 2 mins read
Europe Economics Update Italy: moderate finance minister won’t save BTPs Italy’s new government may initially steer clear of major fiscal loosening, but it will have to provide some more support to cushion the blow from the energy crisis. Given Italy’s fiscal... 24th October 2022 · 4 mins read
Europe Economics Weekly Draghi out, Meloni in; new EZ forecasts We published our latest quarterly Euro-zone Economic Outlook this week, with the main message being that we now expect the euro-zone to experience an even more extreme case of stagflation. Otherwise... 21st October 2022 · 12 mins read