Welcome to the web site of Economic Research
The correction on the French housing market continued through 2014. It was a measured correction in the pre-owned sector, and more pronounced in new-build. In 2015-2016, the factors operating will be more or less the same, with two possible differences in that mortgage lending rates could stop falling and stabilise, while the support measures for new-build housing could drive a slight recovery in the sector. Volumes look set to ease back in the pre-owned sector, and prices are forecast to fall by 2.5% per year, while developer new-build sales could rebound by 5% a year.
The UK general election on May 7th is expected to result in another hung parliament: neither the centre-left Labour Party nor the centre-right Conservative Party is likely to win an outright majority in the House of Commons. The Conservatives are marginally ahead in the projections of seats, although the first-past-the-post system favours Labour. Forming a coalition is unlikely to be easy and might require more than two parties in order to get a majority in the 650-seat Parliament.
Today Mario Draghi reaffirmed the ECB's strong commitment to asset purchases until the Governing Council sees "a sustained adjustment in the path of inflation". While the tone of the statement was marginally more positive ("risks have become more balanced"), the renewed focus on inflation "trends", ignoring one-offs and temporary deviations, suggest that the ECB will refrain from major policy changes for now.
The ECB's Bank Lending Survey for Q1 2015 was consistent with a further improvement in the Eurozone credit cycle, including a better transmission of monetary policy transmission to SMEs. The missing link to a sustainable recovery remains investment which contributed negatively to loan demand, with the exception of Spain. The ECB will need to see stronger hard data before it turns more confident about investment prospects.
We expect the ECB to show a steady hand in QE implementation at its regular policy meeting on Wednesday, playing down speculation regarding an early tapering of asset purchases. The Governing Council should also reaffirm that -0.20% is the “effective lower bound” for the deposit rate, as stated in the March accounts.
Highlights: In Poland, the outlook for 2015 is favourable. Caught between sabre rattling and debt negotiations, Ukraine is approaching a crucial period... In South Africa, the rand's depreciation is starting to play its role as a shock absorber for the external accounts. In China, real estate prices continue to fall. In Colombia, the oil price counter-shock is under control.
The recovery, which was restricted to the US and UK only a few months ago, is now definitely spreading to other countries. The growth upticks in the Eurozone and Japan differ from the cruising speed now achieved in the US. First off, they are far more modest. They are also more fragile, as they owe a great deal to the drop in oil prices. Another support factor, this time linked more to economic policies, is the relative strength of the US dollar.
Edition April 23, 2015
France : Existing housing prices
Sectors, regions, videos, graphics... all the economic information that you needs !