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☆ Europe's problems are far bigger than a shallow recession
▼ + stars: | 2023-11-14 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

Deep structural problems mean Europe is bound to trail most other big economic areas for years to come. The labour market remains tight and the world economy is rebounding, so external demand is also likely to be healthier. Fearing it will be difficult to hire in future, firms are now hanging onto workers, creating even more labour market tightness, potentially fuelling wage growth and weakening productivity. The potential growth rate for Europe's largest economy is now below 1%. European Union governments are meanwhile struggling to reach consensus on bigger questions that will help shape the future.

Persons: Philip Lane, Erik Nielsen, Eric Gaillard, Europe's, There's, Lane, Reinhard Cluse, Mark John, Catherine Evans Organizations: Central Bank's, REUTERS, European Commission, UBS, European Union, Thomson Locations: FRANKFURT, Europe, Nice, France, United States, Germany

ECB chief Christine Lagarde may stick with the high-for-longer mantra that has pushed up long-dated bond yields. A weakening economy meanwhile suggests the need for further tightening is limited but the ECB is likely to push back against rate-cut speculation. ECB chief economist Philip Lane says the ECB will need time, possibly until next spring, before it can be confident that inflation is coming down. The ECB expects headline inflation to ease to 3.2% in 2024 from an average of 5.6% in 2023. Oil price moves, inflation outlook shifts4/ What does the ECB do if things go wrong with Italy?

Persons: Christine Lagarde, Johanna Geron, Francis Yared, Philip Lane, Lagarde, PEPP, Reinhard Cluse, Chris Jeffrey, Cluse, ING's Brzeski, Dhara Ranasinghe, Stefano Rebaudo, Naomi Rovnick, Susan Fenton Organizations: European Central Bank, Parliament's, Economic, Monetary Affairs, REUTERS, ECB, Deutsche Bank, Reuters Graphics Reuters, UBS, Reuters, Legal, General Investment Management, Treasury, Thomson Locations: Brussels, Belgium, Europe, United States, Italy, Germany

European Central Bank (ECB) President Christine Lagarde speaks to the media following the Governing Council's monetary policy meeting at the ECB headquarters in Frankfurt, Germany, July 27, 2023. "It's such a close call between the pause and the rate hike," said ING's global head of macro Carsten Brzeski. Traders are torn but favour an ECB pause, pricing in around a 40% chance of a hike. For many economists, one thing is clear: if the ECB has further tightening to deliver, September is likely its last chance. Even the hawks, keeping a hike on the table, say fresh ECB projections on Thursday are key to the decision.

Persons: Christine Lagarde, Kai Pfaffenbach, Reinhard Cluse, Mario Centeno, Isabel Schnabel, Austria's Robert Holzmann, Iain Stealey, Philip Lane, Kaspar Hense, Yoruk Bahceli, Stefano Rebaudo, Dhara Ranasinghe, Susan Fenton Organizations: European Central Bank, ECB, REUTERS, Central Bank, Traders, UBS, JPMorgan Asset Management, Reuters, ING, BlueBay Asset Management, Reuters Graphics Reuters, Thomson Locations: Frankfurt, Germany, Italy

Euro zone interest rates have risen 400 basis points in the last year to 3.5%, their highest in 22 years, and are now close to peaking as headline inflation cools and the economy weakens. 1/ How much will the ECB hike rates? "The ECB will hike again and anything else would be a major surprise," said RBC Capital Markets global macro strategist Peter Schaffrik. Reuters Graphics Reuters Graphics3/ When does the ECB expect core inflation to fall? Euro zone business activity stalled in June as a manufacturing recession deepened and a previously resilient services sector barely grew.

Persons: Silvia Ardagna, Peter Schaffrik, Christine, Lagarde, Massimiliano Maxia, Reinhard Cluse, Ruben Segura, BofA, Philip Lane, BofA's Segura, Naomi Rovnick, Stefano Rebaudo, Vincent Flasseur, Sumanta Sen, Pasit, Kripa Jayaram, Catherine Evans Organizations: European Central Bank, Barclays, ECB, Capital, Reuters, Allianz Global Investors, U.S . Federal, Reuters Graphics Reuters, UBS, Bank, Thomson Locations: Cayuela, Europe, London, Milan

Headline inflation slowed in November for the first time in 1-1/2 years, to 10%, raising hopes that sky-high price growth has passed. ECB President Christine Lagarde will likely be careful about calling a peak after last year's "big mistake" of insisting surging prices were "transitory," said Pictet's Ducrozet. ECB Chief Economist Philip Lane reckons wages would be a "primary driver" of price inflation even after energy price shocks fade. Closely-watched business activity data points to a mild recession and latest forecasts should show how the ECB views the coming slowdown. Lane believes record price growth will start to subside next year.

☆ It'll be difficult for Europe to attract LNG if China's energy demand rebounds, economist
▼ + stars: | 2022-11-08 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailIt'll be difficult for Europe to attract LNG if China's energy demand rebounds, economistReinhard Cluse, chief eurozone economist at UBS Investment Bank, says China hasn't been consuming as much energy as it used to, which has allowed Europe to direct global LNG glows from Asia toward Europe.

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