War in Iran is causing the European economy to stagnate — CNN
New survey data indicates that the military conflict in Iran has led to a sharp rise in costs, a decline in business confidence, and a slowdown in production in the UK and EU countries.
CNN reports this.
The first signs of the conflict’s negative economic impact on the global market have been recorded in the latest Purchasing Managers’ Index (PMI) reports.
These indicators are based on surveys of business leaders in the manufacturing and services sectors.
“The war in the Middle East hit the UK economy in March, halting production growth and pushing inflation sharply higher,” said Chris Williamson, senior economist at S&P Global.
According to him, further consequences will depend on the duration of hostilities and the scale of disruptions in energy and logistics.
The military conflict has also had a noticeable negative impact on the neighboring Eurozone.
Production growth in the 21 countries that use the euro has slowed to a state close to complete stagnation due to a sharp drop in business confidence.
“Corporate costs are rising at the fastest pace in the last three years amid soaring energy prices and supply chain disruptions caused by the war,” Williamson emphasized in the report.
Experts note that this situation creates ideal conditions for dangerous economic phenomena to emerge.
The data obtained is already prompting experts to speak of the threat of stagflation in the eurozone. This is a critical scenario in which economic growth stalls alongside an uncontrolled rise in prices for goods and services.
As a reminder, Iran has continued its missile strikes on Israel, despite Trump’s statements about negotiations.
Iran is also threatening to completely close the Strait of Hormuz in the event of attacks on energy facilities.
