Economy

ECB vs. inflation
Shock inflation in the EU in March – the biggest increase in four years

The eurozone suffered the biggest inflation jump in March since Russia’s invasion of Ukraine in 2022, Bloomberg reports.

According to a first round of official data, consumer prices rose by 0.7 percentage points in the wake of the US attacks on Iran. This would mean that inflation in March landed at 2.6 percent, according to forecasts compiled by Bloomberg.

Now more and more economists are trying to take into account such outcomes and what it means for monetary policy in the coming months.

– Our negative scenario, with a prolonged conflict and persistently high energy prices, would trigger at least three interest rate hikes from the ECB – and a technical recession, says Ludovic Subran, investment manager at Allianz.

Fuel prices
Diesel prices have risen 38 percent in one month

Diesel prices in Sweden are being increased by over 1 krona per liter, DI reports.

This means that diesel, which cost 17.30 kronor per liter on February 28, has now risen by about 6.50 kronor per liter to 23.84 kronor per liter since the war in the Middle East broke out.

The increases come despite Donald Trump on Thursday postponing his threat to attack energy infrastructure in Iran for ten days. If the war continues, there are fears that oil prices could double to a new record level of 200 dollars per barrel.

– This would mean that Swedish fuel prices would rise to close to 30 kronor per liter, says Handelsbanken's former commodities analyst Christian Kopfer.

Economic effects
The Iran war hits India's growth hard

March looks set to be the worst month in India's history when it comes to net outflows from the stock market. The equivalent of 111 billion kronor has flowed out of the market since the start of the war, writes CNBC.

Few other countries in the world import as much oil and fossil gas. The impact will therefore be very large when supplies stop. India's economic growth could fall from a projected 7.2 percent to 6.5 percent in the wake of the war, according to a new forecast.

– The longer the conflict continues, the deeper the negative impact on India's economic growth will be, writes Matthews Asia's chief investment officer Peeyush Mittal.

Political situation in France
War headache for Lecornu after French budget soup

It took forever for French Prime Minister Sébastien Lecornu to push through his budget. And when it finally did, it was war in the Middle East.

– An energy crisis has never been good news for government finances. Not in 1975, not in 1979, not in 1990, not in 2003, not in 2007 or in 2022. It will not be the case in 2026 either, said Energy Minister Roland Lescure this week.

Lecornu now faces several new difficulties, writes Le Monde. He must ensure that this year's budget is adhered to while also getting an austerity budget for 2027 through – this at a time when the presidential election is just months away and the level of fighting is rising. The latter is becoming almost impossible, writes the newspaper.

The prime minister could at least be happy about one figure on Friday: the budget deficit was slightly smaller than expected. Today he will gather his most important ministers and heads of agencies to "put some pressure" on them, according to sources.

Oil market
Bessent: Will soon escort ships through the Strait of Hormuz

The United States will soon offer insurance and escort for oil and gas tankers in the Strait of Hormuz, with the aim of increasing passage through the strait. This is according to US Treasury Secretary Scott Bessent, writes Bloomberg.

Three weeks ago, Donald Trump made a similar statement on Truth Social, but there is still no evidence that ships have managed to get through the Strait of Hormuz with American help.

The Strait of Hormuz has been largely closed since the US and Israel launched a war against Iran on February 28. This has led to higher oil prices, as a fifth of the world's oil usually passes through the strait.

Bessent also claims that traffic through the strait has begun to increase and will continue to increase in the coming days.