Inflation is back with a vengeance in the Eurozone, sending the cost of living to record
highs. Aside from pandemic-related base and one-off effects, snarled-up global supply
chains have failed to keep up with post-pandemic demand. To add to this, the war in
Ukraine and sweeping lockdowns due to China’s zero-Covid policy have further disrupted
trade flows and contributed to exploding commodity prices – notably for energy. Europe
has been particularly affected, given its stronger reliance on energy imports and the recent
depreciation of the euro to a five-year low against the US dollar.

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