Episode Details

Eurozone GDP barely edged up by 0.1% in Q1 2026, down from 0.2% in late 2025, due to the U.S.-Israel strike on Iran. Germany outperformed, growing by 0.3%, while Italy and Spain slowed less than expected. Households and businesses are now grappling with inflation fears and contracting business activity. Inflation hit 3% in April, with core measures dipping to 2.1%. The ECB faces a delicate balance, holding rates steady but markets bet on hikes by June. The region is on thin ice as the full impact of the war looms.

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