Iran war squeezes Europe’s economy as growth slumps, prices surge

ECB expected to hike rates after Strait of Hormuz disruption pushes ​inflation above target

Global Economy Slowing as Middle East Conflict Bites, Surveys Show

Growth in the European Union (EU) is now projected to slow to 1.1 percent in 2026, down 0.3 percentage points from the autumn forecast, while inflation is expected to hit 3.1 percent — a full percentage point higher than previously forecast and well above the European Central Bank's (ECB's) target.

Germany and France, Europe's two largest economies, both showed signs of strain as energy costs and uncertainty weighed on demand levels.