Europe’s economy is slowing sharply as the Iran war drives up energy costs, deepening pressure on households and challenging policy makers. Fresh data for May showed euro zone business activity contracted at its fastest pace in more than two years while inflation pressures intensified, raising fears of a prolonged cost-of-living crunch and possible recession.
The energy shock from the Iran war is seeping ever deeper into the European economy, presenting policy-makers with a dilemma as it simultaneously weighs on growth and pushes prices higher, a broad set of data on Thursday showed.
