Gordon Brown issues warning about inflation and recession
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Many are pointing the finger at Brexit for the UK’s financial difficulties, but countries around Europe are in a similar position. Figures show UK inflation is around the same level as the EU as a whole and many countries are in much worse positions.
EU inflation is up to 8.8 percent as the bloc struggles to adapt to growing fuel and energy prices, according to figures from Trading Economics.
The EU is heavily reliant on Russian fuel which accounts for 27 percent of its imported oil, but a partial ban by the end of the year is driving prices up.
Estonia is the worst-hit EU country by inflation which has reached a staggering 20 percent as it gets to grips with rising energy, food and rental prices.
Other Baltic countries such as Lithuania and Latvia are not far behind with inflation rates hitting 18.9 percent and 16.9 percent respectively.
Turkey’s inflation is the worst in Europe right now and hit a 23-year high of 73.5 percent this month.
Food prices in Turkey are increasing rapidly and President Erdogan’s strategy to keep it under control is not working.
Ukraine’s inflation rate is at 18 percent and its economy is predicted to shrink in half by the World Bank this year due to Russia’s invasion.
Sanctions from the west are beginning to hurt Russia but not as quickly as expected as its inflation rate is at 17.1 percent right now.
EU finance chief Mairead McGuinness put much of the rising costs in the EU down to Russian aggression towards Ukraine.
Speaking at the European Parliament’s Committee on Economic and Monetary Affairs last week, she said: “In December, I think there were reasons for optimism as we looked to the future.
“Sadly, that optimism is tinged with huge uncertainty because of the invasion on February 24th.
“We know that inflation is now a reality; Interest rates are also expected to increase.”
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The bigger economies in Europe have fared better at keeping inflation down.
France has one of the lowest levels of inflation in Europe at 5.2 percent but this is rising and President Macron is under pressure from voters having lost a parliamentary majority on Sunday.
Germany also has a lower inflation rate than the UK at 7.9 percent which is also less than the EU average.
Non-EU members Switzerland and Liechtenstein have the lowest inflation rates on the continent at just 2.9 percent and 2.5 percent.
The World Economic Forum blames much of Europe’s high inflation rates down to the post-pandemic recovery and a change in spending habits.
It said in a statement in May: “The rise has been driven in large part by pent-up consumer demand after the pandemic and the Russian invasion of Ukraine.”
Prices are expected to continue to rise this year and the cost of living crisis will become more pressing during winter when demand for energy increases.
Energy prices are due to rise again in the UK by about £800 in October according to energy watchdog Ofgem.
Full list of inflation rates by EU country on June 22, 2022, according to Trading Economics:
Turkey – 73.5
Moldova – 29.1
Estonia – 20
Lithuania – 18.9
Ukraine – 18
Russia – 17.1
Belarus – 17
Latvia – 16.9
Czech Republic – 16
Bulgaria – 15.6
Romania – 14.49
Poland – 13.9
Bosnia and Herzegovina – 13.2
Slovakia – 12.6
Kosovo – 12.5
Macedonia – 11.9
Montenegro – 11.7
Greece – 11.3
Croatia – 10.8
Hungary – 10.7
Serbia – 10.4
Cyprus – 9.1
United Kingdom – 9.1
Belgium – 8.97
European Union – 8.8
Netherlands – 8.8
Spain – 8.7
Euro Area – 8.1
Slovenia – 8.1
Portugal – 8
Germany – 7.9
Ireland – 7.8
Austria – 7.7
Iceland – 7.6
Denmark – 7.4
Sweden – 7.3
Finland – 7
Italy – 6.8
Luxembourg – 6.8
Albania – 6.7
Malta – 5.8
Norway – 5.7
France – 5.2
Faroe Islands – 4.4
Switzerland – 2.9
Liechtenstein – 2.5
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