Iran conflict risks stagflation in Eurozone
A study by the European Central Bank showed that consumers in the Eurozone responded more quickly to the Iran war compared to their reaction to the Ukraine war, which could make the economic impact of the new shock deeper and faster. Nearly half of the survey participants focused on price changes by March 2026, even though inflation was close to 2%, the central bank's target level. The study indicated that memories of previous crises, especially the Ukraine crisis, increased consumers’ sensitivity to rising prices, potentially threatening a decline in spending and pushing the region toward stagflation.
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