The ongoing conflict in Iran is exacerbating Europe's economic woes, driving up energy costs and leading to a sharp slowdown in business activity and rising inflation. This raises concerns about a prolonged cost-of-living crisis and potential recession.

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.