ecb forecasters slash growth and raise inflation outlook as energy shock bites 20260504

The ECB's revised forecasts reflect a direct pass-through from Middle East conflict-driven energy price increases to eurozone inflation and growth. The channel is input_cost: higher energy prices (crude, gas) raise production costs across industries, squeezing margins for energy-intensive sectors (refining, chemicals, metals) and reducing household purchasing power. The impact is region-specific (eurozone) but with global implications via EUR/USD and commodity demand. No single company or supply chain bottleneck is identified; the mechanism is macro-driven energy cost shock.