Inflation in the euro zone’s four largest economies hovered above the European Central Bank’s 2 percent target for a third straight month in May, preliminary data showed on Friday, as a rise in fuel costs triggered by the Iran war began to feed through to other prices.

The ECB warns the Iran war could raise euro-area inflation expectations as oil tops $120 per barrel and firm-level forecasts climb from 2.5% to 3.0%.

Inflation in the euro zone’s four largest economies hovered above the European Central Bank’s 2 percent target for a third straight month in May, preliminary data showed on…