European inflation and risks rise in wake of Iran war; UK bills 13%

![European inflation and risks rise in wake of Iran war; UK bills 13%]/blog-images/gen-d13d3823-b9b8-479c-b0ea-d7218f824d8c.jpg)

European Central Bank (ECB) research concluded that the Iran war could hurt eurozone consumers in two ways. It noted that the war could negatively affect consumer sentiment and real purchasing power at the same time. The study said its findings are a factor policymakers should take into consideration.

The ECB’s chief economist said the Iran war could have a lasting impact on inflation. He noted that disruptions to energy and raw-material supplies could keep inflationary pressure elevated. The remarks warned of the possibility of lasting effects that go beyond a short-term shock.

The ECB warned that the fallout from the war could amplify Europe’s financial vulnerabilities. It said stress could increase on the financial conditions and debt-servicing capacity of banks and companies. The central bank pointed to the possibility that these vulnerabilities could spill over into financial markets and the real economy.

In the UK, energy bills are expected to rise due to the impact of the war in Iran 13%. The outlook found that the burden of energy costs on households will increase significantly. It noted that rising energy costs could put additional pressure on households’ real incomes.

ECB Governing Council member Radev warned that action in response to the fallout from the war should not be delayed. He stressed the need for a timely policy response. He pointed out that delays could exacerbate financial instability and inflation problems.

The announcement and outlook show that energy prices, inflation, financial stability indicators, and policy responses must all be monitored at the same time. Governments and central banks in various countries are expected to make further announcements and take additional measures. The related figures and announcements are important grounds for assessing the future direction of policy.