The ECB said euro-area household consumption plunged in the initial weeks after
the outbreak of the Iran war as consumer confidence collapsed, and warned a
renewed escalation could again curb spending. In its economic bulletin the
central bank said April consumption fell to roughly 2.5% YoY — about half the
pace seen since mid-2024 when nominal consumption averaged 3–4% — and that the
April drop was roughly twice the decline implied by historical-trend forecasts
and comparable to the hit after the Russia‑Ukraine outbreak in early 2022. The
The slowdown was driven by higher-income households cutting discretionary spending;
the ECB said this pattern points to households postponing purchases rather than
being income-constrained.
