Infrastructure’s ability to offer downside protection from slower economic growth will be crucial for the remainder of 2025 and into 2026. Although direct tariff impacts are relatively muted in Europe, uncertainty has eroded investment confidence, which will drag on economic growth.

Softer levels of investment due to global trade uncertainty have now been baked into a downwardly revised 2025 and 2026 economic growth scenario. The macroeconomic outlook envisaged at the start of the year was one of relatively supportive conditions for the European infrastructure market — accelerating growth, interest rates continuing to move toward more accommodative levels and inflation becoming more benign. However, the risks to the growth outlook were weighted to the downside based on the electoral promises of the Trump administration to implement trade tariffs. This downside risk materialized rapidly, with tariff actions from the United States going beyond targeting key trading partners