Today’s turbulent global economy has everyone on edge, as inflation has taken its toll on ordinary people’s wallets and energy prices continue to soar around the world. According to Credit Suisse, “the worst is yet to come” as analysts at global investment banking believe the European Union (EU) and the UK are already facing recession. S&P Global has a similar guess as a report released by the Manhattan Company explains that the UK is currently in the grip of a year-long recession.
Nord Stream gas pipeline rupture increases tensions between Russia and the West – Putin says ‘end of Western hegemony is inevitable’
The global economy looks even worse after the Nord Stream pipeline burst, as many believe the conflict between the West and Russia has escalated dramatically. The United Nations details that the destruction could have been the largest methane release ever recorded in history. In addition, the Nord Stream pipeline problem means that Europe will find it harder to access natural gas this winter. The price of natural gas in the EU has skyrockets to an elevated life alongside a myriad of Europeans sources of energy.
In addition, both sides blame each other for the rupture of the Nord Stream pipeline while Vladimir Putin declared the act an “unprecedented sabotage” and an “act of international terrorism”. Meanwhile, US President Joe Biden said the Nord Stream leak was also a “deliberate act of sabotage”, and he further noted that the Kremlin blaming the United States for the breakup was simply wrong. Putin too Noted during a recent speech that “the end of Western hegemony is inevitable”. The speech Translated by Constantin Kisin September 30 explains that Putin thinks the West is greedy and seeks to enslave nations like Russia.
Kisin’s translation further indicates that Putin pointed out that the West leverages finance and technology to bring other nations into submission. The West collects a “hegemonic tax”, according to the Russian president. “They don’t want us to be free, they want the Russians to be a bunch of soulless slaves,” Putin told attendees at the event.
There was a strong reaction from the participants and one person said:
We will beat them all, we will kill them all, we will plunder all their belongings. It will be what we like to do.
Reports from Credit Suisse and S&P Global note that Europe and the UK are already facing a recession – “Europe faces a difficult and uncertain geopolitical and economic outlook”
Amid heightened tension, a Credit Suisse report says the UK and Europe are already in recession and the US is “flirting” with one. The global investment bank analyst explained that some of the weight came from central banks raising interest rates. “The rise in rates combined with the ongoing shocks leads us to revise downwards the GDP forecasts”, details the report from Credit Suisse. “The Eurozone and the UK are in recession, China is in growth recession and the US is flirting with recession.”
The Credit Suisse report adds:
Crucially, the increasing share of price categories above central bank inflation target levels shows that inflation is widening from a limited set of factors related to supply shocks to more general inflation. This enlargement requires tougher politics and weaker economies as it increasingly reflects tight labor markets.
The Credit Suisse report follows recent statements by Citadel CEO Ken Griffin at a conference last Wednesday. Griffin explained that Citadel is “very focused on the possibility of a recession.” In addition, analysts in a report published by S&P Global explain that the United Kingdom and Europe are already in recession and that the war between Ukraine and Russia is exacerbating the economic gloom in the region. S&P Global Regional Chairman of Credit Conditions Paul Watters said the EU has a tough winter ahead and the European economy faces heightened credit risks.
Watters believes EU measures to cap energy prices will protect Europeans from inflationary pressures this winter. “The fiscal support measures rolled out by the government, including the upper limit set on typical household energy bills, will significantly protect household budgets from even greater pressure on inflation over the winter.” , says Watters. “This, together with the continued resilience of the labor market, are the main reasons why we do not expect the UK economy to deteriorate.”
The S&P Global report continues:
Europe faces a difficult and uncertain geopolitical and economic outlook, as Russia’s political risk appetite appears to increase after territory losses in Ukraine, and sky-high energy prices fuel inflation, triggering interventions to support consumers and businesses, with central banks rapidly recalibrating interest levels.
During this time, the US Dollar Index (DXY) fell from recent highs recorded nine days ago, and myriad fiat currencies around the world rallied against the greenback. The euro managed to rebound 2.15% in the last seven days against the US dollar, and the british pound rose 3.95% this week. However, the pound is down 14.98% over the past six months and the euro has lost 11.25% against the greenback. The Russian ruble, on the other hand, has risen 42.44% against the US dollar over the past six months.
What do you think of the reports that say Europe and the UK are already in recession? Let us know what you think about this topic in the comments section below.
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