The worst & best of times
Economic & political risks are rising around the world. But governments, firms, & investors should be looking to new opportunities as well as managing risks.
‘It was the best of times, it was the worst of times, …it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair’, Charles Dickens, A Tale of Two Cities
On multiple fronts, the news flow this week has been bleak. Record-breaking droughts and heat continue to hit Europe, the US, and China (and beyond), with rivers at record lows, agricultural yields and energy production in decline, supply chains being further disrupted, as well as higher excess deaths.
This is contributing to an already-slowing global economy. Part of this is due to surging energy prices, with gas and electricity prices in Europe hitting daily records. A recession in Europe is looking increasingly likely later this year, as industrial production is constrained and household budgets are squeezed.
And inflation is continuing to rise around the world. One striking forecast this week had inflation rising to 18% in the UK. We are likely moving into a new, higher…