The eurozone economy likely started 2025 less weakly than it ended 2024, according to business surveys, but the threat of higher U.S. tariffs still tempers hopes that lower borrowing costs will help fuel a pickup as the year advances.
The Composite Purchasing Managers' Index, released by Hamburg Commercial Bank and S&P Global on Friday, rose in January to 50.2 from 49.6 a month earlier. That beat economists' forecasts for a reading of 49.8 this month. The reading over 50 indicates private-sector activity increased for the first time since August, but only very weakly.
Signs that the economy remains sluggish add to the likelihood that the European Central Bank will lower its key interest rates at next week's meeting of its governing council. Investors expect the ECB to continue with cuts for the following two meetings, according to LSEG Refinitiv data.
Write to Joshua Kirby at [email protected]; @joshualeokirby