Special
The UK is still working, producing and consuming less than it did in late-2019, yet still bumps up against capacity constraints. The weakness on the supply side of the British economy is an urgent concern that caps growth and adds to inflation.
Special
The economy of the United Kingdom experiences a ‘European’ demand shock but also has ‘American’ labour shortages. Weak growth and high inflation is the result. Meanwhile, there is a constant threat of a trade war with the European Union.
Special
The war in Ukraine has significantly raised the risk of a recession in the Eurozone this year. With its large exposure to key Russian and Ukrainian import goods inflation could rise even faster and amplify a ‘supply shock’ that had already been in the making.
Special
The Social Democrats are in pole position to lead Germany’s next coalition government, but protracted negotiations seem likely. A best guess is that Scholz will eventually lead a ‘Traffic light’ coalition of the SPD, the Greens and the FDP. There are, however, considerable divides to bridge and it could potentially take months before the successor to Merkel is finally decided.
Special
US and European natural gas prices have jumped to multi-year highs; to the extent that comparisons with the 1970’s oil crises are perhaps not as far-fetched as some would think.
Economic Report
The reopening of euro area economies has spurred economic activity. Eurozone GDP grew with 2% q/q in 2021Q2. The recovery should be sustained in the coming quarters. The Delta variant is mainly a risk for the outlook of tourism dependent economies.
Special
The German economy will recover quickly, driven by foreign- and pent-up demand. Its traditional unease with soaring prices will be tested. The September election is going to be crucial: Germany faces some tough decisions.
Special
The Scottish regional election is potentially shaping up to have a big impact on the future of the UK. Scottish independence has returned to the top of the agenda and the SNP will argue to have a fresh mandate. The economic argument for Scottish independence is weak, but the Conservatives aren’t in the position to credibly make this case.
Economic Report
In the first quarter, the Eurozone economy contracted with 0.6%. Germany the performed worst among the large Member States (-1.7%). We project the recovery to resume in the current quarter and the EU recovery fund to lift GDP by 0.5% over 2021 and 2022.
Special
The EU-UK trade agreement marks the start of a complex relationship in which the UK and the EU will have to learn to live together separately. This won’t be without frictions.
Special
The mandates of Brexit negotiators Barnier and Frost don’t ‘click’, no matter how long they keep talking. As the talks go down the wire, political intervention remains necessary to break the deadlock.
Special
The negotiations on a EU-UK trade deal are reaching a climax. Even as the scope of the aspired agreement remains limited, there is a non-negligible chance that the talks still collapse. However, the economic effects are overshadowed by the pandemic.
Special
Markets and media are focused on everything related to Covid-19, yet the Brexit-clock ticks away in the background. The first real deadlines are nearing fast. There are plenty of compelling arguments to extend the transition period; we challenge the conventional wisdom and look for reasons why the UK government would not ask for more time.
Special
The coronavirus has a devastating impact on societies and economies, but never before have so many resources been channelled at finding ways to mitigate a virus. Hopes are pinned on vaccines, medicines, testing and increased health care capacity.
Special
Brexit has finally become a done deal, but the next phase of the negotiations is much broader in scope. The little time available limits the potential of any EU-UK agreement. Indeed, Brexit has been gradually defined in much harder ways.
