The ECB’s March projections now see eurozone growth averaging just 0.9% in 2026, a downward revision driven by the global effects of the Middle East war on commodity markets, real incomes and confidence — while headline inflation has been revised up to 2.6% for this year. Traders have already moved to price in the possibility of ECB rate hikes later this year, even as the central bank itself is stressing a data-dependent, meeting-by-meeting approach. The euro’s challenge is that Europe is particularly exposed to imported energy costs, and any signal that the strait closure is becoming entrenched will press harder on the eurozone’s fragile growth outlook than almost anywhere else. Tuesday’s flash inflation reading for March will be closely scrutinised for early signs of energy pass-through into consumer prices.
EUR: Growth outlook weighs on single currency
Charles Purdy
on March 30th, 2026 
