By DAVID McHUGH<\/p>\n
FRANKFURT, Germany (AP) \u2014 Soaring oil prices from the Iran war<\/a> pushed inflation higher in Europe in April, as growth continued to underperform in a worrying combination both for consumers and policymakers at the European Central Bank.<\/p>\n Annual inflation in the eurozone \u2014 the 21 countries that use the shared euro currency \u2014 rose to 3% from 2.6% in March, fueled by a 10.9% increase in energy prices, the European Union statistical agency Eurostat reported Thursday. Crude oil is trading above $120 per barrel, up from around $73 before the outbreak of the war<\/a> on Feb. 28.<\/p>\n Meanwhile, eurozone growth for the first three months of the year disappointed with a marginal increase in economic output of 0.1% over the quarter before. <\/p>\n The war is dealing a huge shock to the global economy<\/a> because Iran has blocked the Strait of Hormuz,<\/a> the waterway through which around 20% of the world\u2019s oil formerly passed on its way to customers from producers in the Persian Gulf. The surge in oil prices has been quickly reflected at gas stations and in the price of jet fuel.<\/a><\/p>\n Rising inflation has raised concerns it may become built into the economy along with slow or nonexistent growth, a policy conundrum dubbed \u201cstagflation\u201d that leaves central banks like the ECB with few attractive choices. The usual antidote to inflation is for the central bank to raise its benchmark interest rate, but that can slow growth by raising credit costs for buying things.<\/p>\n ECB policymakers left their benchmark interest rate unchanged Thursday even though the annual rate of inflation is now clearly above the bank\u2019s target of 2%. The bank\u2019s benchmark rate has been unchanged at 2% since June 2025.<\/p>\n ECB President Christine Lagarde said at a post-decision news conference at the bank\u2019s headquarters in Frankfurt that the bank\u2019s governing council had debated a rate rise Thursday. She said the council would revisit the bank\u2019s stance with new information at the next meeting June 11 without committing to any particular path for rates. <\/p>\n Although some economists have used the term recently, she said the eurozone was not facing stagflation like that afflicting Western economies after the oil shocks of the 1970s. <\/p>\n Lagarde said the situation today was not comparable, with inflation less ingrained and a stronger labor market supporting an economy that is not in recession. She said the term was \u201csomething that I park in the \u201970s\u2026 this is not something we\u2019re seeing for the moment.\u201d<\/p>\n \u201cWe don\u2019t apply that flashy term, \u2018stagflation,\u2019 to the circumstances that we have.\u201d<\/p>\n Western economies suffered high inflation after twin oil shocks from the 1973 Arab oil embargo against the US and the 1979 Iranian revolution \u2013 bad memories revived by the Hormuz closure. <\/p>\n Other central banks are also on pause. The Bank of Japan<\/a> and the U.S. Federal Reserve<\/a> both left rates unchanged at meetings this week, and the Bank of England<\/a> also held steady Thursday.<\/p>\n","protected":false},"excerpt":{"rendered":"By DAVID McHUGH FRANKFURT, Germany (AP) \u2014 Soaring oil prices from the Iran war pushed inflation higher in…\n","protected":false},"author":2,"featured_media":27624,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[635,15,5300,3140,49,11894,314],"class_list":["post-27623","post","type-post","status-publish","format-standard","has-post-thumbnail","category-europe","tag-business","tag-european","tag-latest-headlines","tag-national-news","tag-news","tag-social","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/27623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=27623"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/27623\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/27624"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=27623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=27623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=27623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}