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Economics View

The economics team headed by our Chief Economist Dr Holger Schmieding has economists in London, New York and Hamburg. With this international presence we can offer our clients insights from the key financial centres.

"The economy and politics shape the major trends on the financial markets, in Germany, Europe and the world. We look at the top issues and discuss them with our clients."

Dr Holger Schmieding, Chief Economist

Chart of the week

On our research portal
Every week we present a different chart on current develop­ments toge­ther with our in-depth analysis and offer you our assess­ments.

Forecasts at a glance

On our research portal
Every week we provide you with a fore­cast of the economic develope­ment in the most impor­tant economies.

Reports

On our research portal
As required, we publish in-depth analyses on important individual topics and long-term outlooks such as the Euro Plus Monitor or Strategy 2030.

Macro views

COVID-19: mixed news with some positive trends
RECORDED INFECTIONS (see chart 1 below and pages 2-3 of the slide pack)

• Eurozone: After a temporary decline to 27.4 recorded daily infections per 100,000 people on 9 April, the incidence number has edged up again to 30.0 on 15 April. The temporary dip seems to have reflected less intense testing and…

Macro views

COVID-19 trends: update and slide pack
Infections

• A third wave: After a decline in January and February, confirmed SARS-CoV-2 infections are rising again in most continental European countries due to the rapid spread of more contagious variants (especially France and the Netherlands). In the Eurozone, the seven-day average of recorded daily…

Macro views

COVID-19 in Europe: weekly update and slidepack
Infections

• Risk of another major, broad-based wave receding: Some advanced economies – most prominently Italy – continue to record a notable rise in daily new infections. Recorded cases have started to stabilise in France and the Netherlands, but remain at elevated levels after notable increases…

Macro views

COVID-19 in Europe: weekly update and slidepack
Infections

• Another wave? Some, but not all advanced economies may be heading for another wave of infections before better spring weather and continued mass vaccination should bring numbers down for good. First the bad news: Among the major western European countries, daily new infections have risen…

Macro views

How dangerous is the bond market correction?
Reflation hopes and concerns that central banks may turn off the liquidity taps early are driving a sell-off in bond markets. Does the rise in yields pose a serious risk to our above-consensus outlook for economic growth and for risk markets? Not really, in our view. We see a return of bond yields from…

Macro views

COVID-19 in Europe: weekly update and slidepack
Infections

• Another wave? Recorded cases of daily new infections keep falling in those advanced economies which suffered the strongest spikes two months ago, notably the UK, Spain, Portugal and Ireland. But these countries are now the exception rather than the rule. Confirmed cases are on the rise…

Macro views

COVID-19: third-wave risks in Europe
The writing is on the wall: exactly one year after Covid-19 started to strike Europe badly, much of the continent may be heading for a third wave. The semi-lockdowns that have been in place more or less since November have sufficed to contain the second wave of the original virus. But they have not prevented a…

Macro views

COVID-19 in Europe: weekly update and slidepack
Infections

• Recorded cases of daily new infections keep falling in most advanced economies, especially in Portugal, Spain, the UK and the US which suffered the strongest surges recently. Recorded numbers are also heading lower in Germany and France. Despite the considerable progress, recorded cases…

Macro views

COVID-19 in Europe: weekly update and slidepack
Virus metrics

• Infections: Advanced economies on both sides of the Atlantic are re-gaining ever more control over the winter wave of the pandemic. Recorded cases of daily new infections are falling across the board. In countries which suffered the strongest surges recently such as Portugal, the UK,…

Macro views

Macro update: advantage Draghi; dirty debt tricks, Euro inflation
Advantage Draghi - but can he deliver serious reforms?

Giuseppe Conte foundered in the end because he could no longer count on sufficient support in the Italian parliament. His designated successor as Italian prime minister, Mario Draghi, may face the opposite problem: too much…

Macro views

COVID-19 in Europe: weekly update and slidepack
Recorded infections

• Eurozone: Recorded daily infections have edged lower over the past week – the first time this year after weeks of stagnation. While a week does not make a (downward) trend yet, the share of positive tests has also fallen further and the progress seems to be broad-based across…

Macro views

Vaccinations in the EU: the risks stemming from the slow start
The European Union is lagging far behind the UK and the US in vaccinating its people against Covid-19. On 31 January, the total number of vaccinations administered per 100 people – the sum of first and second doses – had reached 14.4 in the UK and 9.4 in the US versus 2.8 in the EU (3.3…

Macro views

COVID-19 in Europe: weekly update and slidepack
Recorded infections:

• UK: The UK continues to re-gain control over the second wave. Recorded cases have fallen as sharply over the past 2.5 weeks as they had surged in the five weeks before. The share of positive tests has headed further down while the test intensity has remained very high. Despite…

Macro views

COVID-19 in Europe: weekly update and slidepack
Recorded infections:

• UK: The UK is re-gaining more control over the second wave by the day. Recorded cases have been receding as fast over the past 10 days as they had surged in the five weeks before. The share of positive tests has continued to head lower while test intensity has shot up further.…

Macro views

Political crisis in Italy: a cause for concern?
Italian prime minister Giuseppe Conte has lost a small coalition partner which had – so far – granted him a majority in parliament. The political crisis in the midst of the second wave of the pandemic shines a spotlight on Europe‘s long-standing top political risk: if new elections were to sweep…

Macro views

COVID-19 in Europe: weekly update and slidepack
After a major fall in November the number of daily new infections is edging up again in Europe. Worryingly, they are rising from a still-high level.

Macro views

German politics after Merkel: stability or trouble ahead?
Three stages to choose a successor: German Chancellor Angela Merkel has shaped European politics like few other leaders in the past 15 years. She will leave office at the end of her fourth and final term next autumn. The three-stage process to replace her has just started.

Macro views

European update: growth, fiscal deal, ECB, Brexit
Ahead of another but now almost final Brexit deal deadline tonight, let us lean back and take a look at the bigger European picture. Although the economic situation looks set to worsen near-term due to a renewed rise in Sars-CoV-2 infections, the medium-term outlook remains unusually bright.

Macro views

ECB: extending a helping hand for longer
More support for longer. The European Central Bank (ECB) today delivered roughly what markets and we had expected. This may have been the ECB’s last big push to fight the Covid-19 recession, but it remains to be seen whether it is its last big push to fight low inflation. In response to a yet again sizeable…

Macro views

Cancelling ECB-held debt? The worst idea of the year
In response to the Covid-19 mega recession, debt ratios are surging across the advanced world. At the same time, central banks are gobbling up most of the increase in public debt through their asset purchases. Perhaps unsurprisingly, a few pundits and mid-level officials in Southern Europe have…

Macro views

EU summit preview: €1.8trn deal at risk?
EU leaders will have three tough nuts to crack at their virtual summit this Thursday: the EU’s financial future, a more coordinated approach to the second wave of the corona pandemic, and the chances for a modest post-Brexit deal with the UK. The first of these three will shape the future of the EU even more…

Macro flash

UK: rising confidence & surging retail ahead of summer spending spree
Spring has sprung for the UK economy: Led by a rapid recovery in domestic demand, the UK is building serious recovery momentum heading into the summer. Household confidence continued to rise in April, underpinned by rapid vaccine progress and easing virus restrictions, while…

Macro flash

European PMIs herald solid rebound
Supported by an aggressive monetary stimulus, an adequate fiscal response and strong global demand, Europe is on track for a solid rebound from the Covid-19 recession. Although the current wave of the pandemic forced parts of the Eurozone to extend or tighten their lockdowns in April, even the badly battered…

Macro flash

ECB flash: no news is good news
The Eurozone remains on track for a solid rebound from the Covid-19 recession from May onwards, supported by an aggressive monetary policy and an adequate fiscal stimulus. The outlook has not changed materially since early March. Robust foreign demand seems to be roughly offsetting the temporary drag from a delayed…

Macro flash

UK: inflation jumps on oil price effect and building recovery
Inflation normalising

After the COVID-19 shock, a VAT cut in the hospitality sector and an ultra-low oil price temporarily pushed inflation towards zero last year, the latest data show a fading of one-off factors and a broadening recovery in inflation commensurate with the emerging…

Macro flash

ECB preview: a time to prepare, not act
The European Central Bank (ECB) can take it easy this Thursday. The economy and inflation are roughly on track, financing conditions are favourable and markets are calm. The ECB Council need not take any policy-relevant decision or change its guidance in any way. Although the ECB may tweak the precise wording…

Macro flash

Germany: Laschet versus Baerbock - what is at stake? (copy 1)
The parties have made their choice. “Continuity” candidate Armin Laschet will run for the CDU/CSU to succeed Angela Merkel as German chancellor after the 26 September election. The Greens already nominated Annalena Baerbock as their candidate yesterday without any fuss. The noisy conflict…

Macro flash

UK: stable labour market as economy emerges from lockdown
Still holding up

After the sharp drop in employment, hours and wage growth during the first wave of the pandemic in Spring 2020, the latest data continue to show that the labour UK market remained mostly stable through the now fading second (winter) wave of the pandemic. As part of a…

Macro flash

High noon in Germany: Söder, the Greens and the court
Söder against Baerbock in September? Germany will be in the news in the next two days and weeks. In Angela Merkel’s CDU/CSU, the fight about a joint candidate to succeed her as chancellor after the 26 September election seems to have tilted a bit in favour of Markus Söder. The dispute could be…

Macro flash

UK quick take: Haldane steps down as BoE Chief Economist
**Andy Haldane, BoE Chief Economist and influential Monetary Policy Committee member, will leave his various roles at the bank after the June MPC meeting** (BoE press release)

 

Sterling as well as gilt yields have dipped slightly – although not significantly – on the news, implying that the…

Macro flash

UK GDP: rebound started in February, EU trade picks up
Signs of an early Spring this year for the UK economy: Monthly GDP data released today shows that a modest economic recovery started in February already. The ONS estimates that real GDP increased by 0.4% mom after declining by an upwardly revised -2.2% (from -2.9%) in January. As the whole of…

Macro flash

German politics: the race is on
Who will succeed Angela Merkel as German chancellor after the 26 September national election? The two top parties vying to lead the next German government have both vowed to nominate their candidate between Easter and Pentecost (23 May). Whereas Merkel’s centre-right CDU/CSU is under pressure to settle the issue soon…

Macro flash

UK chart pack: rapid rebound, then back to the ‘old normal’
Overview - Chance for a UK revival

• The economic wheel of fortune seems to be turning back in the UK’s favour. A successful vaccine rollout, aggressive policy support and a solid global backdrop set the stage for at least two years of rapid economic rebound from the massive…

Macro flash

German conservatives: falling from grace
Mismanagement hurts: Last March, a deft response to the pandemic sent support for Chancellor Angela Merkel and her CDU/CSU almost into the stratosphere. Whereas Germany handled the first wave of the pandemic better than most other developed countries, this is no longer the case. Confusing policy shifts and…

Macro flash

Eurozone PMI: better than expected but risks are looming
A nice surprise: March’s flash PMI data from IHS Markit showed a broad improvement in the manufacturing and the service sectors across the main European economies. Eurozone business activity returned to growth for the first time in six months. The composite PMI rose to 52.5 from 48.8 in the…

Macro flash

Eurozone consumption: rebound delayed
Ready to roar once lockdowns are eased: Across the advanced world, households are eager to spend more on consumer services once the pubs, shops and theatres are open again. By and large, consumers have the money to do so. We estimate that households in the Eurozone last year saved 50% more than in 2019 as…

Macro flash

UK consumer confidence rebounds, underpinned by strong finances
UK household confidence turned sharply higher in March, underpinned by rapid vaccine progress, solid balance sheets and improving expectations for the recovery.

 

• Headline consumer confidence jumped 7 points to -16, the highest level since March 2020 – Chart 1

• Households’ current…

Macro flash

France: the return of Marine Le Pen
How much do we have to worry about Marine Le Pen? Some 13 months ahead of the French presidential election, the leader of the far-right National Rally is riding higher in opinion polls than ever before. As polls suggest that she would lose only narrowly to President Emmanuel Macron in a run-off vote, the tail risk…

Macro flash

BoE emphasises upside risks, no pushback on higher yields
Improving outlook: Reacting to the rapid pace of vaccinations at home and the improving global backdrop, the BoE’s nine member Monetary Policy Committee’s (MPC) is turning more optimistic about the UK economic outlook. Crucially for markets, policymakers remained comfortable about the recent…

Macro flash

BoE preview: improved risk assessment may push yields higher
BoE policymakers meet this week against a backdrop of rapid vaccine progress at home and an improving global economic outlook. When the minutes are published at 12:00GMT on Thursday, financial markets will likely focus on the Monetary Policy Committee’s assessment of the recent rise in…

Macro flash

German politics: what the Greens are up to
Germany’s Green Party will most likely be part of the next German government after the 26 September 2021 federal election. We see a 20% probability that the next chancellor after Angela Merkel’s final term ends later this year will hail from the Greens. Although Merkel’s centre-right CDU/CSU remains the…

Macro flash

German election season starts with a bang
CDU FALLS TO HISTORIC LOWS IN TWO STATE VOTES

Some six months before the end of Angela Merkel’s final term as chancellor, Germany‘s election season has started with a bang. Support for Merkel’s centre-right CDU fell to historic lows in two state elections. A kickback scandal in the CDU/CSU parliamentary…

Macro flash

UK-EU trade: uncertain outlook after sudden BREXIT stop
Brexit hurts. Although it is still early days for the new UK-EU relationship, the January data on UK trade paint a clear picture: while the free trade agreement for goods that the UK and EU signed late last year has mostly brought an end to four and a half years of uncertainty, it does not hold…

Macro flash

ECB puts its money where its mouth is
Reacting to the recent rise in bond yields, the ECB today announced that it will conduct asset purchases under its Pandemic Emergency Purchase Programme (PEPP) “over the next quarter … at significantly higher pace than during the first months of this year”.

 

Despite some verbal interventions against the…

Macro flash

UK corporate tax hikes - impact, outlook, risks
• UK headline corporate tax set to rise to 25% from 19% in 2023 – reverses 40-year downtrend

• UK business taxes likely to remain competitive despite planned rises – effective rate much lower than headline rate

• Rising taxes on businesses will hurt margins and could further hamper the UK’s…

Macro flash

Germany after Merkel: key test ahead
LASCHET OR SÖDER?

The centrist “continuity“ candidate Armin Laschet remains in the pole position to succeed Angela Merkel as German chancellor in late 2021. To get there, the leader of the CDU party will need (i) his party to anoint him – rather than the Bavarian CSU prime minister Markus Söder – as the joint…

Macro flash

Spain: strong rebound ahead but risks are looming
Like other economies in Europe, Spain looks set to bounce back strongly once lockdowns can be eased. But risks remain tilted to the downside near-term. If Spain misses the crucial summer tourist season due to insufficient progress against the pandemic, economic growth could disappoint in 2021.…

Macro flash

ECB Preview: Putting more cards on the table
The ECB is in a bind ahead of its Governing Council meeting this week. For one thing the economic and financial backdrop suggests that the ECB should maintain its policy stance. Then again it faces an unstable equilibrium it has itself contributed to: While financing conditions have remained favourable, a…

Macro flash

German ZEW: high hopes for bright 2021 after dark winter
High(er) hopes: Ever more financial analysts are turning optimistic about the outlook for the German and Eurozone economy.

 

Both in Germany and Eurozone: Against our and consensus expectations of a small fall to c60 points, the ZEW headline expectations index for Germany surged to 71.2…

Macro flash

UK Q4 GDP: second wave hit not nearly as bad as spring collapse
Lockdowns hurt, but we are getting used to them

After the almost V-shaped rebound in Q3 (16.1% qoq) from the unprecedented 19.0% plunge in Q2, we awaited the Q4 GDP data release with bated breath. The news is both bad and good. On the downside side, the return of lockdowns from…

Macro flash

Mario Draghi and the twelve rules of Hercules
The members of the Five Star Movement, the largest group in parliament, are holding an online vote today (from 9h to 17h GMT) on whether to back a government under the premiership Mario Draghi. We are confident that Draghi will be able to form a mixed government composed of both technocrats and…

Macro flash

What has gone wrong with France's vaccinatino strategy?
France is near the bottom of the ranking in Bloomberg’s worldwide Covid-19 vaccine tracker. As of 6 February, merely 2.7% of the population have received one shot of the vaccine, and just 0.3% have been fully vaccinated since the start on 27 December last year. Confronted with harsh criticism…

Macro flash

BoE: less downbeat, negative rates remain far off
Words really do matter

Although the BoE’s nine member Monetary Policy Committee (MPC) voted unanimously to keep current policies unchanged at their February meeting, updated policy guidance has lifted financial market expectations for the main policy rate in 2021. In line with our expectations, the…

Macro flash

Eurozone inflation: shoots up driven by one-offs in January
Biggest jump in 20-year history of Eurozone: Eurozone inflation shot up to 0.9% yoy in January from -0.3% in December. The 1.2ppt rise is the biggest since the start of the series in April 1999 by far. While national data over the past week – starting with Germany on 28 January, Spain on…

Macro flash

Italy: Draghi to the rescue
Here comes “Super Mario”: After two failed attempts to revive Italy’s centre-left coalition, Italian President Sergio Mattarella will meet the former European Central Bank President Mario Draghi at 11h GMT today to ask him to form a broad-based government, bringing in parties beyond those that made up the outgoing…

Macro flash

Eurozone economy: getting away with a black eye in late 2020
Second wave impact: The Eurozone contracted by 0.7% qoq or -5.1% yoy in Q4 2020 and thus -6.8% in 2020, according to a first estimate by Eurostat. Eurostat releases the first estimate without providing details on the GDP components. Judging by the monthly Eurozone and quarterly national…

Macro flash

BoE preview: time for some negative rates
Words matter: Although we do not expect the BoE to announce any significant policy changes at the February Monetary Policy Report on Thursday, a combination of policymakers a) downplaying the chance of negative rates soon and b) sounding optimistic in their economic assessment could shift financial markets’…

Macro flash

UK lockdowns - lessons from money and credit data
Policy continues to support businesses and households

Bank of England data on money supply and credit provide important insights into how businesses and households are reacting to the ongoing wave of the COVID-19 pandemic and national lockdowns since November. From the December money supply data we…

Macro flash

Eurozone economic sentiment: lower, but holding up
Small setback: Economic sentiment in the Eurozone suffered an expected setback in January in response to higher SARS-CoV-2 infections and tighter restrictions at the turn of the year. The European Commission’s gauge for economic sentiment, which comprises business and consumer confidence, fell to…

Macro flash

UK: Another positive labour market surprise
Policy still working well: Thanks to aggressive fiscal support, the UK labour market has consistently beaten expectations since the pandemic hit the UK in February 2020. Latest data for November showed that the CJRS (Coronavirus Jobs Retention Scheme) continued to encourage firms to retain their staff…

Macro flash

German Ifo: Dark winter
In response to the worsening pandemic and tighter restrictions, the German economy has come off to a soft start in 2021. In line with Friday’s softer German PMI survey in January, the widely watched Ifo business climate index fell to 90.1 in January from 92.2 in December.

 

Both current and future conditions weaker: Unlike…

Macro flash

European PMIs: The expected January setback
A dark winter: The second wave of lockdowns weighed on social and economic life in Europe in the first three weeks of the new year heavier than in December, according to the January PMIs. The Eurozone PMI composite index fell to 47.5 in January from 49.1 in December. The composite index declined in Germany…

Macro flash

UK inflation edged higher in December, still subdued
Tentative signs that the disinflation from the virus-shock is fading

Inflationary pressures picked up a little in December despite the severe drag on economic activity following the reintroduction of harsh pandemic restrictions from November onwards. The 0.3% mom estimated rise in the consumer…

Macro flash

ECB preview for Thursday, and 2021
At its meeting this Thursday, the ECB will do what it will likely keep doing for the rest of 2021:

1. leave its policy stance (broadly) unchanged;

2. welcome the (gradual) rise in (medium-term) inflation;

3. stress that it can always do more;

4. highlight that fiscal policy should remain in the driver’s seat.

 

Macro flash

UK: GDP hit from November less bad than in spring
UK real GDP contracted by 2.6% mom in November as the return of lockdowns to contain the spread of the SAR-CoV-2 virus curtailed economic activity. It follows a gain of 0.6% in October. Albeit from a much lower base - after only a partial recovery during the summer from the initial pandemic shock -…

Macro flash

German economy 2020: a year (never) to forget
The Covid-19 pandemic wreaked havoc on the German economy in 2020 and thus crushed our early 2020 expectations of a return from near-stagnation to trend growth following the Trump-led trade wars in 2019. According to a first estimate of Germany’s statistical office Destatis, German real GDP contracted by…

Macro flash

European PMIs: resilient December - setback in January?
The major European economies fared better than expected in the first two weeks of December according to the latest PMI surveys published today. The surprisingly strong improvement in the composite PMIs for the Eurozone reflects the easing of the tough virus restrictions across some major…

Macro flash

German Ifo falls by less than expected
Less bad than expected: In response to a renewed partial lockdown in November and the likely extension if not tightening of restrictions until 20 December, German business climate soured for the second consecutive month in November according to the Ifo survey. But in line with the German PMIs yesterday, the Ifo…

Macro flash

European PMIs: November setback smaller than in spring
The second lockdowns are significantly weighing on economic activity in Europe, but much less so than the first lockdowns did in March and April. While the major setback in the European PMIs suggests that November is a month to forget, markets have good reasons to largely look through the data.

Macro flash

Eurozone inflation: an even stronger case for the ECB to act
Despite the record-breaking rebound of the Eurozone economy in the summer months from the mega-recession in March/April, inflation pressures remained very subdued in October, that is just before major parts of Europe tightened restrictions or imposed new lockdowns to contain the second…

Macro flash

Unemployment edges higher, but some signs of hope
Softening the blow: The damage to UK labour market from the historic coronavirus recession in Spring remained modest in September thanks to the government’s CJRS (Coronavirus Jobs Retention Scheme).

Macro flash

ZEW survey: significant setback, but medium-term is positive
The significant surge of Covid-19 infections and restrictions over the past weeks has dealt a heavy blow to economic sentiment in Europe according to the ZEW survey. The rebound from the mega-recession in spring is officially over.

Outlook in pictures

Covid-19 trends in Europe

Economic Calendar

Important dates to keep in view
Keep an eye on upcoming dates and events throughout the world with direct bearing on the economies and economic developments.

Archive

Contacts

Please find your personal contacts below sorted by the respective locations.

Hamburg

Chief Economist
Dr Holger Schmieding
Phone +49 40 350 60-8021
holger.schmieding@berenberg.com

Senior Economist
Dr Jörn Quitzau
Phone +49 40 350 60-113
joern.quitzau@berenberg.de

Assistance
Marion Stange
Phone +49 40 350 60-8310
marion.stange@berenberg.de

London

Chief Economist
Dr Holger Schmieding
Phone +49 40 350 60-8021
holger.schmieding@berenberg.com

Senior Economist
Kallum Pickering
Phone +44 20 3465-2672
kallum.pickering@berenberg.com

Economist
Salomon Fiedler
Phone +44 20 3753 -3067
salomon.fiedler@berenberg.com

Economist
Guidogiorgio Bodrato
Phone +44 20 3753-3273
guidogiorgio.bodrato@berenberg.com

New York

Head of Economics (US)
Dr Mickey Levy
Phone +1 646 949-9099
mickey.levy@berenberg-us.com