Eurozone Inflation Hits 2.5% Amid Middle East War Energy Surge

Inflation across the eurozone climbed to 2.5 percent in March, up from 1.9 percent the previous month, as energy prices surged amid disruptions from the ongoing war in the Middle East. The increase, reported by Eurostat on Tuesday, marked the highest rate in several months and was driven primarily by a 4.9 percent rise in energy costs, reversing a 3.1 percent decline in February. The conflict, which began on February 28 when the United States and Israel launched strikes on Iran, has blocked much of the oil and gas traffic through the Strait of Hormuz, a critical route for about 20 percent of global supplies, and led to attacks on energy infrastructure in the Gulf region.

In Germany, Europe's largest economy, preliminary data from the federal statistics office Destatis showed consumer prices rising 2.7 percent year-over-year, the sharpest increase since January 2024 and exceeding the 1.9 percent recorded in February. Energy prices in Germany jumped 7.2 percent annually, their first rise since December 2023, while food inflation held at 3.8 percent and services increased by 3.1 percent. Month-over-month, prices rose 0.8 percent, compared to 0.4 percent in February. Economists had...