There are some significant challenges ahead for policy makers in the Eurozone, with household demand and business investment very weak, and low levels of inflation. In this video from April 2016, Henk Potts, Director of Global Research and Investments for Barclays, gives his views on Europe’s economic outlook.

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Video transcript

“We saw growth of around 1.5% in the Eurozone last year, not a fantastic performance, but actually better than we’ve seen in many of the years after the financial crisis.

“We know there are still some significant challenges for policy makers in the Eurozone – household demand still remains very weak, and business investment is very low indeed.

“One of the biggest concerns for policy makers has to be the very low levels of inflation we’ve been seeing. We expect CPI to be just 1 tenth of 1% during the course of this year, and only rising up to 1.3% in 2017 – still well below the European Central Bank’s target of 2%.

“That’s why we’ve had to see such an aggressive response coming through from the European Central Bank. They’ve been ramping up that quantitative easing program, and cutting rates further into negative territory, in an effort to try and stimulate growth to reflate the economy.

“We see some early signs of those benefits coming through, and we expect the Eurozone to grow around 1.6% this year, rising out to 1.8% in 2017.”

Henk Potts, Director of Global Research and Investments, Barclays.

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