Economists say a eurozone recession is now more likely than not

The rising cost of living is hurting euro-area companies and households, with Russia’s energy threats exacerbating that problem heading into the final months of 2022

Economists see the ECB raising interest rates by a half-point in September. Picture: Alex Kraus/Bloomberg.

The risk of a euro-area recession has reached the highest level since November 2020 as energy shortages threaten to drive already record inflation higher still, according to economists polled by Bloomberg.

The probability of output shrinking for two straight quarters has risen to 60% from 45% in a previous survey, and up from 20% before Russia invaded Ukraine. Germany, the bloc’s largest economy and one of the most exposed to cutbacks in Russian natural gas supplies, is likely to stagnate from as early as this quarter.