European Leading Indicators | Interest rates, volatility & the return of offices

Here we look at the European leading indicators in the world of economics.

For in-depth analysis into commodities, trade, equities and more with a focus on Europe

Key Insights:

• Under its base case scenario, Oxford Economics expects the ECB to raise interest rates twice this year, taking the deposit facility rate to 2.50% by end‑2026. The 5‑year Euribor swap rate has risen by around 42bps since the onset of the Middle East conflict. However, this repricing has been relatively modest when compared with the more sustained rate adjustment following the Russia–Ukraine invasion.
  
  
•  The CBOE Volatility Index (VIX) – the market’s fear gauge – has continued to trend lower from its recent peak, falling to 17.48 and below levels seen last year, when volatility spiked following the spring tariff imposition. While uncertainty remains elevated, this could support more real estate investment activity later in the year as markets digest the implications, as seen in 2025.  
   
• Offices were the most invested sector in Europe (excl. UK) in Q1 2026, with volumes surpassing Q1 levels of the past two years, according to preliminary MSCI RCA data. The Active Capital survey also ranks offices as the top investment target in 2026, cited by 69% of respondents. However, investor demand is increasingly polarised, favouring well-located, ESG‑compliant assets over stock at risk of long-term obsolescence.