The near-term outlook for the EU economy has clearly improved. After hitting a soft patch last spring, GDP growth in the EU picked up again towards the end of 2014. Survey indicators and recent hard data suggest that the momentum is continuing, underpinned by three factors that boost GDP growth in the short run. Firstly, the sharp fall in oil prices has increased real household income and boosted consumer confidence; this is reflected in the recent strength of retail sales. Firms are also benefitting from lower energy costs, but strong signs of a pick-up in investment have still to materialise. Secondly, ... (full story)