EU cuts growth forecast as energy prices drive inflation higher

The European Commission lowered its economic growth forecast for the European Union after a new energy shock linked to conflict in the Middle East pushed inflation higher and weakened business confidence across the bloc. In its Spring 2026 Economic Forecast published on Tuesday, the Commission said the EU economy would continue to grow, though at a slower pace than previously expected. The Commission now expects EU gross domestic product growth of 1.1 per cent in 2026, down from the 1.4 per cent forecast issued last autumn.