European surveys give a false sense of hope

Research evidence excerpt

European surveys give a false sense of hope

Global Markets Research

24 July 2026First Insights

Economics - Global

Research Analysts

European surveys give a false sense of hope European Economics

Andrzej Szczepaniak - NIplc

• The July PMIs show scant evidence of the Iran war, despite the survey period andrzej.szczepaniak@nomura.com

occurring after its re-escalation. We believe this positivity on activity and disinflationary +44 (0) 20 7102 3167

pressures will be short-lived should the price of Brent crude oil remain in the $95- George Buckley - NIplc

100/bbl range (or rise above $100/bbl) by mid-August. george.buckley@nomura.com

+44 (0) 20 7102 1800

• Corporates in the euro area are sceptical of the likelihood of second-round inflation Josie Anderson - NIplc

effects. Some 80% of respondents to the ECB’s Corporate Telephone Survey do not josie.anderson@nomura.com

expect second-round inflation effects to occur, due to subdued economic conditions +44 (0) 20 7102 4284

and the employment outlook.

• UK-specific surveys (DMP, BoE Agents), too, show resilient or improved activity and

disinflationary pressures, despite the re-escalation of the Iran war.

• We believe the ECB will hike again in September, raising the depo rate to 2.50% from

2.25%, and we believe the BoE will be on hold this year. That said, what each central

bank will do is ultimately a function of the price of energy, and importantly, the duration

of time at those elevated price levels.

Fig. 1: Activity improved in July despite war re-escalation Fig. 2: Disinflationary pressures could be short-lived

Source: S&P Global, Macrobond, Nomura Source: S&P Global, Macrobond, Nomura

What re-escalation and intensification of the Iran war?

The July PMIs for Europe (euro area, Germany, France and the UK) show scant evidence