Euro zone faces higher inflation and tighter credit, surveys show

Euro zone consumers sharply raised inflation expectations and banks tightened access to credit following the Iran war, indicating an early spillover from higher energy costs. The polls point to a more inflationary, tighter financial conditions backdrop for the euro area, with potential pressure on consumption and lending activity. The news is macro-relevant and could weigh on European assets, particularly rate-sensitive and credit-linked sectors.

Analysis

Euro zone consumers sharply raised inflation expectations and banks tightened access to credit following the Iran war, indicating an early spillover from higher energy costs. The polls point to a more inflationary, tighter financial conditions backdrop for the euro area, with potential pressure on consumption and lending activity. The news is macro-relevant and could weigh on European assets, particularly rate-sensitive and credit-linked sectors.