European Inflation – should we be worried?

From skyrocketing inflation to a potential shortage of gas – several factors could potentially test the resilience of Europe’s economy.

Talk of inflation is increasing. For over a decade, inflation has puzzled economists by staying low in both good and bad times. Since the global pandemic, central banks worldwide have pumped money into the economy at a staggering rate hoping to avoid a global recession. Although this could be the answer to a post-pandemic recovery, prices are bound to rise with too much money in the economy chasing too few goods. As inflation rises, the money you hold today becomes less valuable tomorrow. What does this mean for your living standards?

Our living standards are in direct connection between our income and our expenses. What we so often forget, is that although inflation spikes may come and go, higher prices are forever. Lower inflation rates will only moderate the already existing higher base. With prices on the rise, even temporary inflation will lead us to reduced living standards. In this article, we will look into European inflation and the future of the EU economy.