The Bank of England spoke of a prolonged recession in the British economy, which will last for the whole of 2023
The continuation of the war in Ukraine, the maintenance of high natural gas prices, and the new focus of tension in Asia between China and Taiwan create the right conditions for a new recession, which has been troubling economists and governments for months.
The prospect of recession is also visible in the course of oil prices in the international markets, which for the second day in a row recorded significant losses yesterday, returning to pre-war levels.
Brent dropped to $94 a barrel yesterday, while US crude was below $88 a barrel.
Inside the country, of course, the prices at the pump do not follow the corresponding path, and this is mainly due to the appreciation of the dollar against the euro. However, next week a significant de-escalation of prices at the pump is expected, according to NewsIt.
So the prices continue to remain at high levels, even if a partial de-escalation has been observed in recent weeks in relation to the highs they have recorded, a reduction that reaches for gasoline around 30 cents per liter, however they are significantly different from before war levels.
Specifically, based on the Price Observatory of the Ministry of Development, the average price of gasoline yesterday, August 3, throughout the territory of the country was 2.149 euros per liter, compared to 1.892 euros per liter on the day of the Russian invasion of Ukraine, a change of the order of 13 .6%.
The difference is even greater for diesel. So yesterday the average price was 1.892 euros per liter (2.042 euros if the subsidy given is also calculated), compared to 1.626 euros on February 24. The difference jumps to 25.6%.
In part, this difference is justified by the fact that the euro has fallen against the dollar. Specifically, today the single currency is at 1.0247, while on February 24 it was in the area of 1.1237, a difference of 8.8%.
However, market players estimate that next week we will see a serious drop in prices and in some gas stations in Attica unleaded will be sold below 2 euros, while today there are several gas stations with a price around 2.07 euros.
Particularly important is the drop registered today Thursday in the oil contracts in the commodity markets, due to the intensity of concerns about the possibility of a recession in the global economy, as a result of which they affect downwards the estimates for the demand of the “black gold”.
Yesterday, US crude contracts for September delivery fell below the levels of $90 per barrel, specifically at $87.95, losing close to 3%, which is the first time since the start of Russia’s war in Ukraine , on February 24. The picture is similar for Brent, which was at 93.58 dollars per barrel, losing 3.3%.
The fresh losses come as the price of US crude oil neared a 6-month low on Wednesday. At the heart of concerns about oil prices are concerns about the onset of recession in the world’s largest economies, which could have a very strong impact on the demand for the “black gold”.
Earlier, the Bank of England spoke of a prolonged recession in the British economy, which will last for the whole of 2023.
According to the BoE, Great Britain will enter a recession from the fourth quarter of 2022 that will last for five quarters as real household income after tax will fall sharply in 2022 and 2023 and consumption will begin to contract.
