The euro-area economy eked out 0.1% growth in the second quarter of 2025, according to Eurostat’s flash estimate. On an annual basis output rose 1.4%, beating economists’ projections for 1.2% and easing fears that the bloc would stall after a tariff-distorted first quarter. Resilience was uneven. France expanded by 0.3%, Spain by 0.7% and the Netherlands by 0.1%, while Germany and Italy each contracted 0.1%. Germany nonetheless registered its first positive year-on-year reading since 2022, up 0.4% on a working-day-adjusted basis, whereas Italy’s annual pace slowed to 0.4%. Stronger household demand underpinned the outperformers. French retail outlays rose 0.6% in June, reversing a May slump, and preliminary Spanish data show consumer prices climbing 2.7% from a year earlier in July—the fastest since February and the fourth consecutive month of re-acceleration—while core inflation ran at 2.3%. Investors now weigh whether the European Central Bank will need to deliver further rate cuts after halving its deposit rate to 2% over the past year. Money-market pricing on Wednesday put the probability of another reduction by December at about 50% as services activity holds firm and manufacturing shows early signs of recovery.