KPMG – European Economic Outlook, Feb 2026

This report provides an economic outlook for Europe with key findings on trade deals, manufacturing recovery, inflation, and AI adoption.

It highlights the limited near-term economic payoff from recent trade agreements, the fragile recovery in the manufacturing sector supported by fiscal measures, and expectations for Eurozone inflation and interest rates. The report also discusses the potential end of quantitative tightening programs, the state of AI adoption across European countries, and the implications for labor markets and government retraining efforts.