This research analyses the resilience of selected European labour markets in recent years, highlighting how structural reforms and persistent supply constraints have kept downwards pressure on unemployment. By examining key labour market indicators across these economies, we show that recent economic shocks have had a limited impact, thus underscoring the system’s underlying strength. The report also looks ahead, modelling the potential effects of tariffs and trade tensions on selected labour markets in Europe and evaluating sector-specific implications for unemployment under various stress scenarios. This analysis supports KBRA’s ongoing assessment of sovereign credit quality, with a focus on how labour market dynamics influence broader credit risk profiles.
Key Takeaways
- European labour markets have shown surprising resilience in the face of economic shocks, from the COVID pandemic to geopolitical instability, defying expectations with persistently low unemployment and high…