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The natural gas crisis and the global economy

The news today that Gazprom will further reduce its natural gas supply to Europe increases the likelihood of recessions in the euro-zone, UK and parts of Emerging Europe. It also supports our view that inflation pressures will be relatively persistent in Europe, so the ECB and the Bank of England will be forced to raise interest rates further than markets expect. While some economies will benefit from higher gas prices, the net effect will be negative for the global economy. Drop-In (Weds, 27th July): Will high inflation and monetary tightening result in a global recession? Join this 20-minute briefing on our Global Economic Outlook to find out which economies are vulnerable and which could outperform. Register here.

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