Energy shock from Iran war to weigh on Europe’s growth, boost inflation

The European Union's executive commission cut its growth outlook for eurozone countries to 0.9% for 2026 and raised inflation expectations to 3.0% due to sharply higher energy prices from the Iran war and disrupted oil shipping through the Strait of Hormuz. While the economy is expected to avoid outright recession, consumer confidence has fallen to a 40-month low amid fears of job losses and higher inflation.