Despite a challenging year and a downbeat outlook for Europe, analysts are identifying potential bright spots in 2025. Continued interest rate cuts, a potential shift in US tariffs, and the divergence of peripheral economies are key factors to watch.
Amid a downbeat outlook for Europe , analysts say there could be some bright spots to watch out for in 2025. Continued interest rate cuts, potential U.S. tariffs and the divergence of peripheral economies are among the factors expected to affect the region's fortunes. Chris Watling, CEO and chief market strategist at Longview Economics, told CNBC that' Europe 's going to have some good times' — but maybe not for a while.about falling short of its growth potential, Europe 's had a tough year.
Amid a downbeat outlook, however, analysts say there could be some bright spots to watch for in 2025.expectedAs investors and economists attempt to decipher what's next for the region, here are five key things they're watching as they weigh Europe's prospects for 2025.. Markets are pricing in another 25-basis-points cut when the ECB's Governing Council makes its first policy decision of 2025, according to overnight index swap data.Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly 'Economic logic argues for 50-basis-points moves, I don't think they'll go for 50 basis points,' he told CNBC's'Street Signs Europe.' 'I find the ECB's tone much too hawkish,' Pickering added, explaining that Europe's economic issues had shifted from supply shocks to demand-side problems — making it doubtful inflation would still be'sticky' in six months' time. Index swap data suggests that, like Pickering, the majority of traders are expecting the ECB's key rate — currently at 3% — to be reduced to 2% by mid-2025, with some anticipating further cuts in the second half of the year. In a note to clients at the end of November, analysts at Bank of America declared 2025'the year the policy rate goes below 2%.'for November, the European Commission found consumer confidence fell 1.2 percentage points year-on-year in the euro zon
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