In a European Central Bank blog post, staff analyse daily responses from the first quarter of 2026 Survey on the Access to Finance of Enterprises collected before and after the 28 February outbreak of the war between the United States and Iran. The comparison points to an immediate supply-driven shock for euro area firms. Expectations for non-labour input costs, selling prices and one-year inflation rose sharply, while firms became more pessimistic about near-term turnover, investment and bank loan availability. Wage cost expectations and inflation expectations at three and five years were broadly unchanged, suggesting firms saw the shock as temporary rather than a lasting shift in medium-term inflation. Before 28 February, firms expected selling prices and input costs over the next 12 months to rise by 3.0% and 3.9% on average. After the outbreak, weekly averages rose progressively, peaking at 4.1% for selling prices and 7.7% for input costs, while median one-year ahead inflation expectations increased from 2.5% to 3.0%. The deterioration was strongest in sectors with higher fossil energy use, notably construction and transportation. On financing, the six-month outlook for bank loan availability swung from a net 6% expecting easier access before the war to a net 6% expecting tighter availability afterwards, and energy-intensive firms showed the sharpest worsening in turnover and employment expectations. Investment plans weakened only at the six-month horizon, with three-month expectations broadly unchanged.
European Central Bank2026-05-26
European Central Bank blog analysis finds war between the United States and Iran raised euro area firms short term cost and inflation expectations
The European Central Bank published blog analysis of first quarter 2026 Survey on the Access to Finance of Enterprises data around the 28 February outbreak of the United States–Iran war, indicating an immediate supply-driven shock for euro area firms. Firms sharply raised expectations for non-labour input costs, selling prices and one-year inflation, became more pessimistic on near-term turnover, investment and bank loan availability, and reported the strongest deterioration in energy-intensive sectors such as construction and transportation. Wage cost expectations and three- and five-year inflation expectations remained broadly stable, suggesting firms viewed the shock as temporary.