Middle East conflict

The ongoing Middle East conflict continues to expose energy markets to sharp swings, creating significant volatility in global oil and gas supplies. These disruptions contribute to higher headline inflation, largely through an increase in energy prices, and serve as a downside risk for economic growth. The conflict also fuels trade tensions and protectionist measures, leading to a reconfiguration of trade flows and weighing on confidence across the euro area. While the global economy has shown resilience—partly due to technology investment—the ECB notes that the conflict remains a prominent risk factor for inflation and growth, with potential for both heightened price pressures and supply‑chain disruptions. The ECB noted that services had recovered after weakening at the start of the Middle East conflict Downing Street IMPACTED_BY Middle East conflict· Entity summary generated by Graphiti