LEEDS, England—Europe has been hit hard by the fallout from the war in Ukraine, putting its companies on the front line of what has become a war of economic attrition between the West and Russia that is playing out alongside the real war in Ukraine. The U.K. is suffering more than other big countries in Europe, economists say. Inflation is running in the double digits, higher than all of its Group of Seven industrialized peers with the exception of Italy; gross domestic product shrank 0.2% in the third quarter year-over-year, setting the U.K. on course for a likely recession. Other big economies like Germany and France are increasingly looking like they may avoid one. The British economy is widely forecast to shrink in 2023, faring worse than every G-20 economy except Russia, the Organization for Economic Cooperation and Development says.

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