(Bloomberg) — Welcome to Thursday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:
- European economies are facing a potentially crippling setback to their nascent recoveries if the worsening energy crunch forces many more factories to halt or curb operations
- Bundesbank Vice President Claudia Buch warned of “increasing vulnerabilities” in the financial system and said she’s concerned banks may be too focused on profit, according to Handelsblatt
- The European Central Bank sees euro-area inflation slowing in the course of next year and settling below the 2% target in 2023 and 2024, President Christine Lagarde said
- U.K. households may be starting to spend some of the 170 billion pounds ($225 billion) of excess cash built up during the pandemic
- Americans who were dreading the burden of resuming student-loan repayments in February got a reprieve from President Joe Biden, but they aren’t feeling entirely at ease yet
- Sales of previously owned U.S. homes increased for a third-straight month in November, indicating steady job growth and still-low mortgage rates are helping bolster demand even as inventory remains lean. Meanwhile, U.S. consumer confidence rose in December by more than expected as Americans’ outlook for employment and the economy improved
- Canadian Prime Minister Justin Trudeau’s government is expanding the number of businesses that can use Covid-19 aid programs as the omicron variant fuels a surge in cases and new restrictions in Canada
- New Prime Minister Fumio Kishida’s rhetoric of distributing wealth more equally appears to signal a change of priorities for post-pandemic Japan that may contradict plans to improve the country’s presence as an international financial hub
- Bloomberg Economics expects the PBOC to continue to support growth with further cuts to the RRR and interest rates next year, but aggressive loosening is unlikely
- On this week’s Stephanomics podcast, Former U.S. Treasury Secretary Larry Summers shares how he arrived at his prediction that inflation would run higher than most expected, and why we’re close to the point where it becomes challenging to reduce inflation without giving rise to recession
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