{"id":39621,"date":"2026-05-12T14:22:49","date_gmt":"2026-05-12T14:22:49","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/39621\/"},"modified":"2026-05-12T14:22:49","modified_gmt":"2026-05-12T14:22:49","slug":"eurozone-inflation-hits-3-as-oil-prices-spike-and-economic-growth-slows-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/39621\/","title":{"rendered":"Eurozone inflation hits 3% as oil prices spike and economic growth slows"},"content":{"rendered":"\n

Annual inflation in the 21 countries that use the euro rose to 3.0% from 2.6% in March, driven by a 10.9% increase in energy prices, the European Union\u2019s statistics agency Eurostat reported on Thursday.<\/p>\n

Among the main components, energy recorded the highest annual increase in April at 10.9%, compared with 5.1% in March. This was followed by services at 3.0% (down from 3.2%), food, alcohol and tobacco at 2.5% (up from 2.4%), and non-energy industrial goods at 0.8% (up from 0.5%).<\/p>\n

Prices across Europe have been fuelled<\/a> by soaring energy costs due to the Iran war. Oil prices hit a new wartime record on Thursday morning, with international Brent crude priced above $126 a barrel temporarily in the morning, from around $73 before the outbreak of the war on 28 February.<\/p>\n

Eurozone economic output slowed <\/p>\n

In a double blow to the eurozone, the bloc’s growth in the first three months of the year disappointed, with a marginal increase of 0.1% compared with the previous quarter, according to Eurostat.<\/p>\n

The economy expanded at the same rate in the wider EU in the first three months of 2026. In the fourth quarter of 2025, GDP had increased by 0.2% in both areas.<\/p>\n

Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 0.8% in the euro area and by 1.0% in the EU in the same period.<\/p>\n

This marks a slowdown in economic output as it follows a GDP expansion of 1.3% in the euro area and +1.4% in the EU in the previous quarter.<\/p>\n

The war is delivering a major shock to the global economy because Iran has blocked the Strait of Hormuz, the route through which around 20% of the world\u2019s oil had passed en route from producers in the Persian Gulf to customers.<\/p>\n

The combination of slow growth and high inflation \u2014 known as stagflation<\/a> \u2014 threatens to become a serious challenge for the European Central Bank. Policymakers are expected to leave the benchmark interest rate unchanged on Thursday, even though inflation is now clearly above the bank\u2019s 2% target.<\/p>\n

The rise in inflation is especially concerning because it comes at a time of sluggish economic growth. The usual response to inflation is for a central bank to raise its benchmark interest rate, but this can dampen growth by increasing borrowing costs.<\/p>\n

If inflation is expected to be temporary, policymakers often look through it, as changes in interest rates take time to feed through to the economy.<\/p>\n

Related<\/p>\n

The Bank of Japan and the Federal Reserve both left rates unchanged at meetings this week, and the Bank of England is also expected to hold steady on Thursday.<\/p>\n

As a result, the ECB and other central banks appear to be holding a position, cautiously monitoring inflation while refraining from both rate rises and cuts. The ECB\u2019s benchmark rate has remained at 2% since June 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"Annual inflation in the 21 countries that use the euro rose to 3.0% from 2.6% in March, driven…\n","protected":false},"author":2,"featured_media":39622,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2480],"tags":[7956,89,2487,2486,2800,2485,24220],"class_list":{"0":"post-39621","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-euro-zone","8":"tag-countries-that-use-the-euro","9":"tag-energy-prices","10":"tag-euro-area","11":"tag-euro-zone","12":"tag-eurostat","13":"tag-eurozone","14":"tag-thursday-morning"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/39621","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=39621"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/39621\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/39622"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=39621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=39621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=39621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}