Research Briefing | Jan 12, 2022

Eurozone Recovery Tracker slows down further over Christmas

Ipad Frame - Eurozone-Recovery-Tracker-slows-down-further-over-Christmas

Our eurozone Recovery Tracker saw further deterioration over the Christmas period, falling 1.5pts to 79.1 in the three weeks ended December 26. High-frequency data tend to be noisy around the end of the year. But the direction of travel is clear, and the indicators seem to confirm a further slowdown ahead.

What you will learn:

  • There’s a growing divergence between the subcategories of the Tracker. Consumer spending and mobility have fallen sharply as the health situation deteriorates. On the other hand, however, financial conditions and the labour market remain resilient, while industry is making sustained gains.
  • We expect voluntary social distancing and widespread absenteeism due to self-isolation rules to weigh on economic activity in the next few weeks as the Omicron variant surges.
  • Given its high transmissibility, the wave is likely be sharp but short-lived, while the booster rollout should limit severe outcomes.
Back to Resource Hub

Related research

Office building in London

Post

High debt costs suggest European office price correction

Our analysis suggests a 10% correction is needed on average for the major office markets in Europe to compensate for the higher cost of debt, with prime yields required to soften by 10bps-75bps to generate a low-risk interest coverage ratio at a reasonable LTV.

Find Out More

Post

Why an ageing population doesn’t mean soaring inflation

What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.

Find Out More

Post

Surging global food prices could drive eurozone core inflation higher

Along with energy prices, global food prices have emerged as a key driver of the eurozone's current inflationary surge. Like other advanced economies, eurozone countries tend to be less exposed to global food price fluctuations. But if persistent and combined with strong demand, high food prices could result in a higher pass-through to core inflation.

Find Out More