Lengthy Iran war could cause inflation ‘spike’, warns ECB’s top economist
Financial Times
March 3, 2026
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The European Central Bank’s top economist, Philip Lane, has warned that a prolonged conflict involving Iran could lead to a significant spike in inflation and a sharp decline in Eurozone economic output. He emphasized that disruptions to energy supplies resulting from the war could exacerbate already high inflation levels across the region, potentially causing widespread financial instability.
The Eurozone’s vulnerability to energy price shocks is particularly concerning, as many countries rely heavily on oil and natural gas imports. If the conflict continues, it could further strain global supply chains, leading to higher production costs for businesses and increased prices for consumers. This would complicate the ECB’s efforts to control inflation, which has already reached multi-year highs due to energy shortages and rising demand.
Lane also highlighted the potential for a significant drop in Eurozone output, warning that extended
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Originally published on Financial Times on 3/3/2026