{"id":969059,"date":"2026-05-18T16:04:22","date_gmt":"2026-05-18T16:04:22","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/969059\/"},"modified":"2026-05-18T16:04:22","modified_gmt":"2026-05-18T16:04:22","slug":"eu-warns-iran-war-is-causing-stagflation-shock","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/969059\/","title":{"rendered":"EU warns Iran war is causing stagflation shock"},"content":{"rendered":"

\"EU<\/p>\n

The EU will downgrade its growth forecast because of the “stagflationary shock” caused by the Iran war, the bloc’s commissioner for the economy told CNBC.<\/p>\n

Valdis Dombrovskis, European Commissioner for Economy and Productivity, told CNBC’s Charlotte Reed<\/a> that the spring forecast, released later this week, will see economic growth figures adjusted down and inflation figures up.<\/p>\n

“We are facing a stagflationary shock,” he said on Monday, on the sidelines of the meeting of G7 finance ministers in Paris.<\/p>\n

Fears of stagflation have risen in recent weeks. A lasting settlement to the war in the Middle East has proven elusive and with the vital Strait of Hormuz closed, oil prices remain above $100 a barrel.<\/p>\n

Dombrovskis added that the margin of action by policymakers is “more limited now,” leaving little room for the kind of broad-based fiscal response seen during the coronavirus pandemic.<\/p>\n

“We think it’s important that the support measures we take are temporary and targeted, not ones which actually sustain high demand for fossil fuels,” he added.<\/p>\n

Strategists have warned<\/a> that global oil stockpiles are plummeting and inventories may not recover until December 2027, with physical shortages potentially looming over Europe by the end of this month.<\/p>\n

The International Energy Agency, in its latest monthly update, cautioned that oil inventories globally are depleting at a record pace. “Rapidly shrinking buffers amid continued disruptions may herald future price spikes ahead,” the IEA said.<\/p>\n

Dombrovskis described the EU’s release of strategic oil reserves as “ongoing,” and added that there are some concerns of shortages in areas such as innovation fuels.\u00a0<\/p>\n

“The more protracted the conflict becomes, the more risk of some supply bottlenecks, which reinforces our message that policy response should not increase demand for fossil fuels,” he said.<\/p>\n

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The EU will downgrade its growth forecast because of the “stagflationary shock” caused by the Iran war, the…\n","protected":false},"author":2,"featured_media":969060,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3090],"tags":[229163,4959,51,3085,1700,774,2441,28137,16,15,12923,5190],"class_list":["post-969059","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-lco26n","tag-breaking-news-markets","tag-business","tag-business-news","tag-economy","tag-iran","tag-markets","tag-oil-and-gas","tag-uk","tag-united-kingdom","tag-valdis-dombrovskis","tag-world-economy"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116596433613355748","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/969059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=969059"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/969059\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/969060"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=969059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=969059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=969059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}