Europe Economic Weekly

Research evidence excerpt

Europe Economic Weekly

Global Markets Research

31 July 2026Europe Economic Weekly

Economics - EMEA/Euro Area/Europe

Research Analysts

One step closer to a hike, one step further away European Economics

George Buckley - NIplc

• The ECB is one step closer to a September rate hike. We remain structurally bullish george.buckley@nomura.com

on Spain (versus Germany) when compared with France and Italy. +44 (0) 20 7102 1800

Andrzej Szczepaniak - NIplc • The Bank of England, by contrast, seemed to tone down the risks of a hike at its andrzej.szczepaniak@nomura.com

meeting this week, despite another member voting for a tightening. +44 (0) 20 7102 3167

Josie Anderson - NIplc

Week in review josie.anderson@nomura.com

The ECB is one step closer to a September rate hike. HICP inflation rose in July, in part +44 (0) 20 7102 4284

due to the Iran war, but in part due to an acceleration in core HICP inflation. However,

GDP growth remained resilient despite the Iran war and is hovering at potential.

Separately, we remain structurally bullish on Spain (versus Germany) when compared

with France and Italy.

While the ECB may be one step closer to hiking, the BoE seems to be one step further

away, despite the fact that another MPC member added their name to the growing list of

those voting for a hike. Based on the dovish comments of those voting to keep rates

unchanged this week there seems little appetite among those members to act early to

address the risk of second-round effects, without having seen them in reality.

Data preview

The main data of the week will be Swiss and Swedish inflation figures for July. German

factory orders and industrial output data for Germany and France are also published.

European economic outlook