EUR: Barclays lowered growth outlook
- Most euro area member states disappointed in Q2 with declines in Germany and Italy and stagnation in France. Although Germany is expected to return to moderate growth in the second half of the year, the situation remains worrying in Italy and France, where PMI indices dropped below 50 in August, and even further in France in September according to the flash estimate.
- The Russia-Ukraine conflict is likely to keep affecting the European economy.
- Barclays revised down euro area growth forecasts to 0.7% for 2014 and 1.1% for 2015, down by 0.4pp and 0.5pp than June projections.