However despite the surge in activity, near term the upside for growth will be limited by the substantial fiscal tightening that will increasingly kick in. The EU banking “stress test”, undertaken to assess the overall resilience of banks to absorb further possible shocks to the sector, were another key focus last week. Of the 91 European banks tested, seven failed to meet the 6% tier 1 capital ratio threshold. All UK banks exceeded this threshold with over 3% headroom.

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