A costly winter is coming

Danske Research Team Danske Bank A/S

Europe's gas market is again in focus as the winter approaches, with prices sharply higher and inventories at record lows. The key question is how this will affect the economy and the ECB.

EU gas expenditure this winter is set to be EUR 117bn, or 0.6% of GDP, higher than last year. An extra gas costs of 0.6% of GDP could reduce growth during the winter by around 0.3 p.p., mainly in Q1 2027 and push inflation towards 4%, prompting two additional rate hikes by the ECB.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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