Why the 2020s Have Put the Global Economy Under Severe Pressure

The 2020s have brought repeated shocks that have raised living costs and weakened household spending power. Housing, food, energy and other essentials have become more expensive, while income growth has struggled to keep up. The COVID-19 pandemic caused job losses, supply-chain disruptions and a sharp rise in government borrowing. Its effects were followed by the Russia-Ukraine war, which pushed up energy and food prices, fuelled inflation and led to higher interest rates across many economies. The conflict that followed the October 2023 Hamas attack on Israel added further uncertainty to trade routes and energy markets. Escalating tensions involving Iran and Israel have also increased fears of wider disruption to oil supplies and global growth. Together, these crises have created the risk of prolonged slow growth, high inflation and financial pressure for households and businesses around the world.

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