Europe’s Toilet Paper Inflation Is Not Just A European Problem

Europe’s Toilet Paper Inflation Is Not Just A European Problem
Theodora Lee Joseph, CFA

over 1 year ago1 min

The US is grappling with higher than expected inflation – and Europe’s gas crisis is only going to make matters worse. European industries may soon have to limit their factory hours, as they face higher electricity prices, gas shortages and potential fuel rationing. And that’s going to have an impact.

Just take a look at Germany for example. The chart shows that production prices for pulp have increased close to 60% in the past year, driven by soaring gas and electricity prices. The bulk of this cost will get fed through to consumers – and that means much pricier “loo rolls”, or toilet paper, for the foreseeable future. But that’s far from the only impact. Chemicals, which are a major export for Germany and a key component for many products, are likely to see production severely curtailed because of rising energy costs – and that could lead to supply shortages and further price pressures.

What this means is that Europe’s gas crisis isn’t a problem for Europe alone. It’s going to have spillover effects around the world, likely adding to US inflation pressures this winter. So, with inflation likely to linger for longer, you might want to rethink your investment strategy, and it just so happens we’ve got some tips for you here.



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