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Trade war could cut euro zone inflation further, ECB scenarios show
Published by Global Banking & Finance Review®
Posted on June 5, 2025
1 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 5, 2025
1 min readLast updated: January 23, 2026
The ECB warns that a global trade war could significantly impact euro zone inflation, with scenarios predicting varying outcomes based on US tariffs and EU responses.
FRANKFURT (Reuters) -The outcome of the global trade war could meaningfully alter the euro zone's inflation path, the European Central Bank said on Thursday as it outlined several scenarios to its central view.
In a mild scenario, inflation would average 1.7% next year, above the 1.6% projected by the bank while a severe scenario, which foresees a further increase in U.S. tariffs and retaliation by the EU, would cut inflation to 1.5% next year and 1.8% in 2027.
(Reporting by Balazs KoranyiEditing by Alexandra Hudson)
The European Central Bank indicated that the global trade war could significantly alter the euro zone's inflation trajectory.
In a mild scenario, inflation is projected to average 1.7% next year, slightly above the ECB's previous estimate of 1.6%.
The severe scenario anticipates a further rise in U.S. tariffs and retaliation from the EU, which could lead to more pronounced inflation effects.
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