Europe is in the early stages of economic recovery. With business and consumer con-fidence currently around a three year high, expansion is forecast to gather pace slowly over the rest of the year. Initially led by the United Kingdom and Germany, the recovery is forecast to broaden as a sustained upturn emerges in Southern Europe and as the CEE countries resume economic convergence with the more mature Western European economies.
Despite the return of growth, output levels are on average below potential, with high unemployment and excess capacity evident across much of the continent. Spare ca-pacity, alongside an unexpectedly strong Euro, has intensified the threat of deflation. This led the ECB to loosen monetary policy in June 2014 by cutting its main rate to 0.15%, introducing a negative deposit rate and provide €400 billion of cheap bank fi-nancing.
Source : Deutsche Asset & Wealth Management