Optimism among fund managers has been lifted by falling energy prices and easing inflation, with a majority now seeing a very low probability of a European recession in the coming year, according to a Bank of America survey.

The research team, led by Paulina Strzelinska and Andreas Bruckner, noted that 97% of surveyed fund managers do not expect a recession in Europe over the next 12 months—the highest proportion since 2007.

A net 35% of respondents anticipate an acceleration in European economic growth in the coming months. Equity market sentiment remains robust, with a net 53% of participants expecting European stocks to trend higher over the next one to three months.

The survey also shows that investors still project a 5.7% upside for European equities over the next year. Additionally, 47% of respondents believe European stocks will outperform US equities in the next 12 months, with earnings upgrades cited as the primary driver of the anticipated rally.