Over 2021 the European markets showed overall, healthy growth with Euro STOXX growing 15.31%, although above-average volatility was experienced between September and December due to uncertainty over Germany’s new government and the covid-19 outbreak which prompted renewed restrictions in Northern Europe. However, the European Central Bank adopting a 2% inflation target which was backed by accommodative monetary policy along with the Pandemic Emergency Purchase Programme (PEPP) used to stimulate areas of the economy most affected by the pandemic ultimately proved useful in revitalising the markets and the economy.

Moving into 2022, the European markets have a healthy momentum from 2021’s substantial growth. We have a positive outlook for European markets starting 2022. Germany’s Social Democratic Party (SPD), Green Party and the Free Democratic Party agreed to a coalition deal, with SPD’s Olaf Scholz taking over as the next chancellor and successor to Angela Merkel in addition, the ECB has remained firm in their monetary policy to keep inflation at 2% promoting a stable environment where markets tend to excel.

Although a mostly positive environment, coronavirus remains a hindrance in Europe, along with the rest of the world, is experiencing price rises across various commodities, particularly in natural gas prices, this can result in unplanned inflation trickling through the markets.