Europe Just admitted the Iran War’s price shock isn’t going away
European Union officials have indicated that oil and gas prices will remain elevated until at least the end of 2027 due to the ongoing effects of the Iran war. Inflation is projected to reach 3.1% this year, driven primarily by higher energy costs, with a gradual impact on other sectors. The European Central Bank is prepared to take necessary measures to maintain price stability, although specific actions regarding interest rates remain uncertain.
- ▪Oil and gas prices in Europe are expected to stay above pre-war levels until at least the end of 2027.
- ▪Inflation is forecasted at 3.1% for this year, significantly higher than the previous estimate of 1.9%.
- ▪The European Central Bank is focused on maintaining price stability at 2% amidst rising inflation projections.
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European Union officials said Friday that Europeans can expect oil and gas prices to remain above what they were before the Iran war for at least until the end of 2027, with prices of other goods also following an upward trajectory.Recommended Video EU Economy Commissioner Valdis Dombrovskis said that higher energy prices are primarily responsible for driving inflation to a forecast 3.1% for this year and 2.4% for 2027. That’s significantly higher than the earlier forecast for this year of 1.9%. “We expect that this energy inflation will gradually also trickle down to different sectors of the economy,” Dombrovskis said after a meeting of the 21-member eurozone’s finance ministers, who make up the Eurogroup.
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