Eurozone Inflation Rises to 2.5% in March

FRANKFURT, March 31 — Inflation across the eurozone rose to 2.5 percent in March, surpassing the European Central Bank's target of 2 percent, as surging oil and gas prices driven by the Iran war intensified pressures on the economy.

Data released Tuesday by Eurostat, the European Union's statistics agency, showed overall inflation climbing from 1.9 percent in February, though the increase fell short of economists' expectations for 2.6 percent. Energy costs, a major driver, jumped 4.9 percent, reflecting the near-doubling of oil prices amid the conflict. This surge has created a policy challenge for the ECB, which must weigh the drag on economic growth against the risk of entrenched inflation spilling into broader price increases.

Underlying inflation, which strips out volatile food and energy components, edged down slightly to 2.3 percent from 2.4 percent the previous month. Services inflation, often seen as a measure of domestic price pressures and the largest basket item, also moderated to 3.2 percent from 3.4 percent. Despite these signs of cooling in core measures, the energy shock has heightened concerns about potential second-round effects, where businesses incorporate...