Greg Fuzesi and Allan Monks join Nora Szentivanyi to discuss the nascent recoveries in the Euro area and UK, their varied implications for inflation and expectations for monetary policy easing. Despite raising our sights on Western European growth in recent weeks, we continue to expect the ECB to begin easing in June and the Bank of England from next quarter. A backdrop of a sustained sub-par performance lowers the bar to start the easing process. But the improvement in current growth prospects presents a stickier inflation challenge for the BoE than the ECB. This is reflected in our inflation outlook which sees Euro area core inflation sliding towards 2-2.5%ar, but UK core inflation consolidating near 3%ar in coming quarters.
This podcast was recorded on May 1, 2024.
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