In 2023, energy will remain expensive. Europe has added to its import capacity for liquefied natural gas, but global supplies will not increase by much. Gas-storage facilities are almost full and, thanks to a warm autumn, will not be completely empty by spring. But oil-producing countries seem determined, despite diplomatic pressure from the West, to keep oil scarce and dear. And French nuclear plants will resume output, but not enough to bring power costs down very much. That will leave inflation higher than many had hoped. True, as raw energy prices stop rising, year-on-year comparisons mean inflation will shrink almost mechanically throughout 2023. But some energy prices are capped or set using long-term contracts, and so have yet to rise fully. In the rest of the economy, the energy-price shock will continue to push prices up. Wages will increase to make up for lost real income, adding to firms' costs. Businesses will pass higher costs on to customers to protect profit margins. And rising prices for services, which are largely unrelated to energy, will take time to slow. Consumers and businesses will feel the brunt and start to hold back. In 2022, a year of post-covid recovery, pent-up demand for sunny holidays and fancy restaurants boosted the economy. Industry benefited from overflowing order books from the post-covid surge in demand and the supply-chain disruptions that came with it. But in 2023, household budgets will face a double whammy: higher energy bills and increased mortgage payments as interest rates remain high to fight inflation. Firms will also be squeezed, and so will cut back on investment. All of this will tip Europe's economy into recession. Unlike in previous slumps, the global economy cannot come to Europe's rescue. Export orders for its industry will remain low during 2023, as higher interest rates, the global energy crunch and the strong dollar weaken growth and demand throughout the world. Only once energy prices have come down, and inflation in America has been brought under control, will global growth be able to support Europe's recovery. But that will not happen in 2023.