---
title: "Iran War Pushes Eurozone Inflation to 3%"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/284774951.md"
description: "The eurozone's consumer price index rose to 3% in April, driven by a 10.9% surge in energy costs. Core inflation remained at 2.2%. GDP growth was only 0.1% in Q1, below expectations, as the Iran war impacts confidence. The ECB is expected to maintain its rate at 2%, facing a dilemma between combating inflation and risking recession. Economists warn of potential stagflation if the Strait of Hormuz blockade continues, with a rate hike seen as a possible policy mistake that could lead to a mini-recession by late 2026 or early 2027."
datetime: "2026-04-30T12:49:10.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/284774951.md)
  - [en](https://longbridge.com/en/news/284774951.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/284774951.md)
---

# Iran War Pushes Eurozone Inflation to 3%

The euro zone's consumer price index rose to 3% in April, up from 2.6% in March and well above the ECB's 2% target, driven almost entirely by energy costs which surged 10.9% compared with 5.1% the prior month. Core inflation held at 2.2%, suggesting the broader price pressures remain contained for now. At the same time, preliminary GDP data showed the eurozone economy expanded just 0.1% in the first quarter, below the 0.2% expected, with the Iran war and its energy shock weighing on business and consumer confidence across the region. The EUR/USD added 0.17% to 1.1696.

The principal driver is the Strait of Hormuz blockade, which has disrupted oil and gas supply at a moment when European demand and global competition for alternative sources are both elevated. Economists at Berenberg warned ahead of the data that the fallout from the Iran war is "now battering European economies" and cautioned that the eurozone faces a bout of stagflation as long as the strait remains largely closed.

The ECB's governing council meets today and is widely expected to hold its benchmark rate at 2%. The dilemma for the central bank is that hiking to combat inflation risks tipping a near-stagnant economy into recession, but staying on hold while energy-driven prices accelerate risks allowing the inflation overshoot to become entrenched. Berenberg's base case assumes the worst of the war passes by end of April, but warned that any rate hike in response to what it calls a temporary spike would be a "policy mistake" that could push the eurozone into a "mini-recession in late 2026 or early 2027."

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