Europe's Extreme Weather Threatens 0.2% Hit to Growth

Extreme weather events are increasingly disrupting Europe's economic growth, according to a report by Standard Chartered. The bank notes that severe weather conditions, such as heatwaves and droughts in Southern Europe, and flooding and storm damage in Northern and Central Europe, are becoming more frequent and intense. These events are not only causing immediate economic losses but also requiring significant investment in adaptation and recovery.

The European Central Bank has estimated that extreme weather could reduce GDP growth by 0.2 percentage points per year in the worst-hit regions. Standard Chartered's report suggests that repeated shocks could dampen investment and consumer confidence, further slowing an already fragile recovery.

The insurance sector is also feeling the strain, with rising claims leading to higher premiums for businesses and households. This adds to inflationary pressures, complicating the European Central Bank's monetary policy decisions.