The outlook is also being affected by the ongoing difficulties in international supply chains for intermediate goods, recently made worse by the restrictions introduced in China to counter the spread of COVID-19 cases.
The latter has resulted in a dramatic increase in unemployment: although in the US and the UK the labour market has recovered, with unemployment rates back to around 6 percent, in the euro area unemployment remains only slightly below its peak levels, at 11.5 percent in July 2014.