EU Inflation Alert: Middle East Tensions Could Push Rates Over 3%

The European Union has warned that its inflation rate might exceed 3% due to higher oil and gas prices connected to the Middle East conflict. This scenario could also reduce economic growth in 2026, dropping it to 1% instead of the previously forecasted 1.4%.

The ​European Union has issued a warning that inflation may soar past 3% this year if the Middle East conflict elevates Brent oil prices to around $100 per barrel and gas prices remain high, according to a report by Bloomberg News.

In such a case, economic growth by 2026 might see a dip, reaching as low as 1%, down 0.4 percentage points from the 1.4% growth rate forecasted last year, stated Valdis Dombrovskis, the EU's economy chief, during discussions with the bloc’s finance ministers.

Efforts to verify the report with original sources were initially inconclusive, Reuters mentioned.