The US-Iran war that kicked off on February 28, 2026, is already reshaping how European businesses think about prices, costs, and the near-term economic outlook. The European Central Bank’s latest quarterly survey of euro area firms shows a sharp upward revision in short-term inflation and cost expectations, with energy-intensive sectors bearing the brunt of the shift.
What the ECB survey actually found
The data comes from the ECB’s Survey on the Access to Finance of Enterprises, known as SAFE, which ran from February 19 through April 1 for its Q1 2026 round. That timing is crucial: it straddles the war’s start date, giving researchers a natural experiment to compare pre-war and post-war responses.
Before February 28, firms expected to raise their selling prices by 2.9% over the following twelve months. After the conflict began, that figure jumped to 3.5%.
One-year inflation expectations told a similar story. The median expectation among surveyed firms rose from 2.5% before the war to 3.0% afterward.
