Director of the Center for the World Economy, Prof. Konrad Raczkowski, in a commentary for Business Insider, assesses that further interest rate hikes, with sudden and ill-considered new proposals to tax windfall profits, among other things, is another element contributing to the coiling of the capital market and stock market.<\/p>\n\n\n\n
Prof. Raczkowski notes that the effect of higher interest rates is all too evident in Poland, where a large proportion of companies have cut investment by two-thirds. Moreover, he points out that the interest rate hikes have had a strong effect. Demand for mortgages in August of this year fell 68.8 percent year-on-year, and Poles have overwhelmingly already lost their creditworthiness. The mortgage market is working, but practically at a standstill, indicating that the space for an interest rate hike has been exhausted.<\/p>\n\n\n\n
Indebted households are finding it harder and harder to make ends meet, an alarming sign of which is the rise of non-bank financing. Additionally, energy self-sufficiency, or lack thereof, will be an indicator of a mild or much deeper recession in Europe. Goldman Sachs estimates that European households alone will see their electricity bills rise by an astronomical $2 trillion by 2023.<\/p>\n\n\n\n
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