The ECB on Thursday, alongside a rate decision, raised its inflation forecasts and trimmed some growth projections, citing an energy shock from the Iran war that is spilling across the 21-member currency union. Euro-area inflation rose above 3% last month and further consumer-price pressure is likely as energy costs climb. With inflation already evident and risks of second-round effects mounting, the ECB hiked rates; market participants price roughly two more hikes over the next year. Higher pri

The ECB on Thursday, alongside a rate decision, raised its inflation forecasts and trimmed some growth projections, citing an energy shock from the Iran war that is spilling across the 21-member currency union. Euro-area inflation rose above 3% last month and further consumer-price pressure is likely as energy costs climb. With inflation already evident and risks of second-round effects mounting, the ECB hiked rates; market participants price roughly two more hikes over the next year. Higher prices and borrowing costs are eroding household purchasing power and corporate margins, weighing on growth in an economy that was only marginally expanding before the conflict.