What is the outlook for Europe in 2020?

All eyes on the ECB

European equities were surprisingly buoyant in 2019 with the MSCI Europe ex UK index seeing gains of 20% in sterling terms, while the Stoxx 600 recently hit a record high and is up 20.5% over the year, despite political uncertainty and a slowdown in economic growth.

Indeed, although the European economy is now in its seventh consecutive year of growth and is forecast to continue expanding in 2020 and 2021, according to the European Commission's autumn forecast, the forecast is at a slower rate than predicted earlier this year. Euro area gross domestic product (GDP) is now expected to expand by 1.1% in 2019 and by 1.2% in 2020 and 2021, revised down from the Summer 2019 Economic Forecast, which predicted growth of 1.2% and 1.4% respectively. Across the EU, GDP is forecast to rise by 1.4% in 2019, 2020 and 2021, with the 2020 forecast revised down ...