Euro-area recession now looks almost inevitable economists warn

Despite a busy tourist season in Europe business surveys signal that economic activity has been contracting since July, Picture: Paul Hanna/Bloomberg.

The risk of a euro-area recession has reached its highest level since July 2020 as concerns grow that a winter energy squeeze will cause a slump in economic activity.

Economists polled by Bloomberg now put the probability of two straight quarters of contraction at 80% in the next 12 months, up from 60% in a previous survey. Germany, the bloc’s largest economy and among the most exposed to cutbacks in gas supplies, is likely to shrink from as early as this quarter.