Euro zone inflation jumps to 3% as economic growth almost stalls

euro zone inflation hit 3% in april, up from 2.6% in march and 1.9% in february. energy costs drove the jump — up 10.9% compared with 5.1% in march. at the same time, the economy barely grew: just 0.1% in the first quarter. the ecb meets thursday and is widely expected to hold rates at 2%. the war in iran is the main culprit — it's blocking the strait of hormuz, spiking fuel prices, and denting confidence. economists at berenberg warned the eurozone and uk could face a bout of stagflation. one relief: core inflation, which strips out food and energy, cooled to 2.2% from 2.3%. morgan stanley said that confirms short-term risks to core inflation are contained and the ecb doesn't need to act fast. berenberg urged the ecb to stay on hold, warning a rate hike now could trigger an unnecessary mini-recession in late 2026 or early 2027.