Eurozone Inflation Blows Past 2% Target as Iran War Doubles Oil Prices; ECB Eyes April Rate Hike

Eurozone inflation surged to 2.5% in March 2026, overshooting the European Central Bank’s (ECB) 2% target due to a massive spike in energy costs. Data released by Eurostat on Tuesday shows that energy prices jumped 4.9%, reflecting the global oil rally triggered by the ongoing conflict in Iran.

While core inflation—excluding volatile food and energy—dipped slightly to 2.3%, the rapid rise in headline inflation is sparking fears of "second-round effects" on wages and services. Financial markets are now pricing in three interest rate hikes this year, with the first potentially coming as early as the ECB's next meeting on April 30th.