Signs are growing that European powers will face recession

In Germany, the ifo Institute reduced its forecast for the country's economic growth.

“We are entering a winter recession,” says Timo Wollmershäuser, head of forecasting at ifo. Next year, the institute expects economic production to shrink by 0,3% and growth of just 1,6% for 2022. Inflation is expected to average 8,1% this year and 9,3% next.

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“Russian gas supply cuts over the summer and the drastic price increases they triggered are wreaking havoc on the economic recovery after coronavirus. We do not expect a return to normal until 2024, with growth of 1,8% and inflation of 2,5%”, he says.

In the UK, the economy grew more slowly than expected in July, with worker shortages and rising costs weighing on activity amid the heightened risk of recession. (The Guardian*)

The Office for National Statistics said gross domestic product (GDP) rose 0,2% in July, following a sharp 0,6% fall in June. Economists had forecast a stronger recovery of 0,4%.