Europe’s energy crisis might soon affect consumer budgets if left unchecked

In light of the geopolitical conflicts taking place against the backdrop of a slowing economy, it is crucial to consider the future trajectory.

Consumers are still being impacted by Europe's energy crisis, which is a result of ongoing conflicts and a faltering global economy placing pressure on the unstable oil and gas markets. Even though there have been significant fluctuations in the value of crude, the price of natural gas has recently been largely unaffected by the Middle East crisis. In October, the price of natural gas increased by 15%. They once experienced a 40% increase, reaching an eight-month high. In light of the geopolitical conflicts taking place against the backdrop of a slowing economy, it is crucial to consider the future trajectory of the gas markets, particularly in Europe.

According to estimates from Bloomberg Economics, in the event of a full-fledged war, the world economy could enter a recession and lose $1 trillion, while oil prices might rise to $150. Naturally, this would also result in a sharp increase in the price of gas. Actually, a lot more. This means increased unpredictability for the typical consumer and household. Consumer budgets suffer as preparation becomes less of a priority when the markets become more prone to swings and volatility. Furthermore, if energy prices remain strong, inflation—which at last appears to be abating—will become sticky and negatively affect consumers' purchasing power, which might then put pressure on the already struggling retail industry.