• The escalation of the conflict between Russia and the Ukraine is likely to have important economic and financial consequences through three main transmission channels — energy, trade, and the financial sector — depending how current and future sanctions will play out. Note that Russia is in a stronger position than it was in 2014 economically speaking.
  • As the world reopens from Covid-19 with higher inflation, disrupted energy and supply chains, and sensitive financial markets, our scenario “Conflict escalation” highlight impacts on Europe’s inflation (+100bps), growth (-0.5pp), equity markets (-10%), sovereign and corporate spreads (+20-60bps), and policy outlook (dovish pivot, fiscal support reloaded to offset impact). Severity of sanctions is a clear gradient for economic and financial markets outcomes.
  • In an extreme “Black-out” scenario in which Russia turns off Europe’s gas supply, the natural gas price would rise to an average of 140 EUR/MW, because alternative suppliers are limited. This would add up to +2.5pp to our current Eurozone inflation forecast of 3.8% this year. As for the headwinds to economic growth, a recession will be all but certain.

103 results

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Oct 05, 2022

Low consumer price for basic energy needs

More and more households can no longer afford the energy bill. Our researchers argue for a fixed low price for basic energy needs. Read more.

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Sep 30, 2022

Missing chips cost EUR100bn to the European auto sector

No industry has been hit harder by the chip shortage than the automotive industry. We estimate that it led to a shortfall of about 18mn of vehicles around the world.

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Aug 31, 2022

Sharp decrease in inflation due to removing trade barriers

Our research department took a closer look at the effect of trade barriers on inflation. Find out the results of the study.

103 results