Improvement so far in the EU has not been faster than we forecast 3 months ago but it has been more broadly based than expected, with stronger growth in Spain and Italy. On the back of that, we are revising them higher (Italy goes from
0.4%/0.9% in '15/'16 to 0.6%/1.5%, while Spain moves from 2.6%/2.1% to 2.8%/ 2.4%). Germany and France trimmed slightly (10bp on both). We also think that most of the benefit to output from lower oil and weaker EUR is still in the
pipeline and also expect Euro Area CPI to rise gradually in the months ahead (likelihood of sustained deflation as a whole remains limited). Political uncertainty (aka Greece) is the main risk to our benign view. See chart below
for complete GDP / CPI f'casts...