For the first time since the Iran conflict sent energy prices spiraling, economists expect euro zone inflation to tick downward in the reading scheduled for the week of June 29, 2026.
The numbers that got us here
Euro area inflation hit 3.2% in May 2026, climbing from 3.0% in April. That’s the highest reading since September 2023, and the culprit is not subtle: energy costs surged 10.8% year-over-year in May, a direct consequence of supply constraints stemming from the Middle East conflict.
Before the Iran war escalated, inflation was actually behaving itself. The euro area was sitting at a comfortable 1.9% before the conflict blew that number up to 2.5% in March 2026. That single-month leap was the steepest since Russia’s invasion of Ukraine in 2022.
What the forecasters are saying
