Haunted Europe is 'avoiding recession'

Europe can avoid a recession despite facing the impact of a double crisis according to Paolo Gentiloni, the European Commissioner for Economy.

The double crisis refers to the impact of Russia's invasion of Ukraine and the subsequent economic hit on Europe.

From a geopolitical point of view, the war has impacted the United States and the rest of the world, Gentiloni told CNBC, but worst from an economic point of view has been Europe in general and Germany in particular. "The slowing down started from the last quarter of 2022," he said, "but please don't call this a recession because I think we can avoid a recession - we are avoiding recession."

This came as analysts agreed a "stagflation" concern continued to haunt Europe.

"The euro area is stuck in stagflation, and we're not going to come out of it any time soon," said Karsten Junius, chief economist at Bank J Safra Sarasin in Zurich. "In the UK everything is going wrong."

Articulating the quandary were comments by European Central Bank official Isabel Schnabel - the policymaker there in charge of markets - who admitted the economic outlook is souring while insisting that inflation is "stubbornly high."

Bank of England chief economist Huw Pill used the same words to describe the level of core consumer price growth in the United Kingdom while also saying people should not inflict "unnecessary damage" on the UK economy.