Economy in Focus #1 – Inflation reaches highest level in decades
In the 1st edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, discusses the record-high inflation levels across Europe, the sharp rise in energy prices, and the impact on consumer confidence. Published in September 2022.
Inflation hits multi-decade highs
In 2022, inflation soared to levels unseen in the past 30 years, driven primarily by rising energy, fuel, and food prices. Energy prices alone account for nearly 50% of the inflation rate.
Consumer confidence at an all-time low
Soaring inflation has severely impacted consumer purchasing power. In July 2022, consumer confidence in Europe reached its lowest point on record, reflecting widespread economic anxiety.
Central banks hike interest rates sharply
In response to inflation, central banks have aggressively increased interest rates, with the ECB delivering a historic 75 basis point hike in September 2022. However, this has increased the risk of a looming recession.
Comment from Intrum's Senior Economist:
"The inflation fears from last year have undoubtedly been confirmed, as rising prices continue to erode consumer confidence and financial stability."
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