Overview
- The European Central Bank is expected to keep its deposit rate at 2% because the Iran war and shipping disruptions near the Strait of Hormuz have raised uncertainty.
- Disruption of a route that carries about one‑fifth of global oil and gas shipments drove energy prices higher, pushing eurozone inflation to 2.6% in March with economists estimating about 3% in April.
- Households’ one‑year inflation expectations jumped to 4% in March, while five‑year views stayed close to 2%, signaling faith that prices will be stable over the longer run.
- Growth signs weakened as April business surveys pointed to contraction across the euro area and banks tightened corporate lending to the most in more than two years.
- Investors are watching for new ECB forecasts in June that could justify a rate increase, even as the Federal Reserve holds steady and the Bank of England is seen standing pat, and economists warn of stagflation risks and call for stronger EU‑level investment.