Should we go ahead with a major purchase or wait it out? Is now the right time to start a business? What will happen to interest rates, and how much further can the cost of living rise?
For millions of Europeans, these decisions have become harder. The surge in the cost of living, swings in energy prices, and higher borrowing costs are creating an environment where planning even a few months ahead feels complicated.
The problem is not only that prices have gone up. It is also that consumers are struggling to gauge what will happen next.
Euronews spoke to financial risk management experts about the options facing consumers and businesses at the sixth HAT International Treasury Summit in Athens, organised by the Hellenic Association of Treasurers.
Should we wait or move ahead?
Janet Legge, deputy chief executive of the UK-based Association of Corporate Treasurers, which represents professionals who manage businesses’ money and financial risks, believes that caution is justified when international developments remain so unpredictable.
Asked what she would advise someone considering starting a business or making a major purchase, she said: "I think we need to watch developments for a while and be somewhat cautious at the moment."
For a household, putting this approach into practice starts with a few basic questions.
How essential is this particular expense? Can it be covered without exhausting available savings? Will it require borrowing and, if so, what share of income will the repayments represent? And what happens if income temporarily falls or some essential costs rise?
Interest rates: why forecasts remain difficult
The path of interest rates is one of the key sources of uncertainty, especially for those who have loans or are considering taking on new debt.
Speaking about the UK, Legge noted that interest rates were expected to ease, but the experience of recent years shows how easily forecasts can be overturned.
"In recent years we keep hearing that interest rates are about to fall and then they go back up again," she said.
In her view, volatility is likely to be a feature of the new normal.
"They will go up and down, and we will have to adapt," she said.
For borrowers, the key question is how their own contract is affected: whether the interest rate is fixed or variable, when it is adjusted and how much the monthly repayment can change.
How to protect the household budget
Gilles Bonn-Long, an executive in corporate cash management, links pressures on the cost of living to international geopolitical developments.
And he warned that living costs could continue to rise in the short term.
His main advice to consumers is "careful management of spending".
This means tracking monthly outgoings more systematically and planning purchases more carefully. It is also useful to distinguish between essential expenses, such as housing and energy, and those that can be adjusted more easily.
What businesses can do
For businesses, uncertainty is not confined to product prices. It affects the cost of financing, the supply of raw materials and their ability to plan future investments.
Bonn-Long stressed the importance of strategies to limit risk, commonly known as hedging. This means using financial contracts to limit the impact of changes in interest rates or prices.
"From a corporate perspective, it is important to have hedging policies in place to limit exposure to rising variable interest rates," he explained.
These include interest rate swaps, which can allow businesses to exchange variable interest payments for fixed ones, and similar strategies to limit risks from changes in commodity prices.
A more optimistic assessment came from Ralf Kesten of the German company cflox, which specialises in working capital management.
As he explained to Euronews, higher interest rates and the successive crises of recent years have pushed up operating costs for businesses, putting pressure on their liquidity. However, he believes there are now more solutions available to help address these challenges.
"We are seeing prices rise, but there are also solutions that can help companies and prevent consumers from being excessively burdened," he said.
Planning for uncertainty
Experts agree on one key point: uncertainty requires preparation.
For consumers, this means having a clearer picture of their finances and being more cautious about the commitments they take on. For businesses, it means identifying risks early and planning how to deal with them.
Perhaps the most important dilemma is the one posed by Janet Legge: how long can we wait before we feel confident enough to take our next decision?
In a period when conditions are constantly changing, she told us, the answer lies neither in rushing nor in postponing everything. It lies in being able to take decisions based on adequate information, realistic planning and enough flexibility to adapt when the facts change.
