Surging gas prices drive energy prices higher

This week the soaring costs of energy dominated the headlines again.

The confirmation of the price cap increase in the UK means people are likely to pay almost three times as much on their energy bills this winter, while the market rate of electricity in Germany and France continued to skyrocket. Much focus is on Russia’s actions. It is planning to shut down the main gas pipeline into Europe later this month, supposedly for temporary maintenance. The huge surge in gas prices signals people aren’t convinced they’ll restart it.

Elsewhere there is more bad news on the horizon. Leading indicators are showing a big decrease in economic activity as rising rates and costs squeeze businesses and consumers. While data released this week showed economic growth and earnings in the US holding up, these figures are somewhat lagging. Housing and manufacturing data show a collapse in new home sales and orders and are more reliable canaries, typically leading a recession by six to 12 months. The next domino to fall would be earning and profitability, a sure sign that recession was indeed imminent.

For the following stories, please click on this link*

• Global – Falling economic output raises stakes for Central Banks
• Commodities – Surging prices paint a bleak picture for UK inflation
• China: New attempt to boost economy and revive property market

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