Rabobank’s RaboResearch Global Economics & Markets report indicates a painfully slow manufacturing recovery in the Eurozone, with industrial confidence remaining weak.
The report also notes that some European central bankers view the cutting cycle as concluded, even as others remain open to further cuts, highlighting policy uncertainty.
Eurozone growth near stagnation, ECB hesitant on cuts
“The European Commission’s November Economic Sentiment survey, published yesterday, signals a painfully slow manufacturing recovery.”
“Overall, this confirms our view that Eurozone growth faces near-stagnation rather than robust expansion, as the economy continues to absorb the impact of US import tariffs.”
“Yet with the labor market cooling and real wage growth slowing, household spending will likely weaken in coming quarters.”
“On the positive side, lower energy prices, slightly easier financing conditions for businesses, and ongoing investment needs in energy transition, automation, digitalization, and defense still offer a path to a production-led recovery in 2026.”
“The accounts of the October meeting revealed that some policymakers had issued the view that the cutting cycle has concluded, although their peers countered that “it is important to remain open-minded on the possible need for a further cut.””
(This story has been created with the assistance of AI.)
Source: https://www.fxstreet.com/news/eurozone-economy-faces-near-stagnation-ecb-cautious-on-rate-cuts-rabobank-202511281331
