The conflict, triggered by US-Israeli strikes on Iran in late February, has led to soaring oil and gas prices because of an almost complete closure of the Strait of Hormuz and attacks on Gulf energy infrastructure.

The European Union has warned that as a result, the bloc is at risk of a "stagflationary shock" -- when slower growth coincides with higher inflation.

Consumer prices rose by 2.5 percent in March, sharply up from 1.9 percent in February, the EU's statistics agency said.

The figure was slightly lower than analysts had predicted but significantly above the European Central Bank's two percent target for the 21-country single currency area.

The last time eurozone inflation reached 2.5 percent was in January 2025.

Energy costs, which had been falling for several months, jumped by 4.9 percent this month after recording a drop of 3.1 percent in February.

EU energy ministers will hold online talks Tuesday afternoon on the fallout from the war as member states worry about high costs for consumers.

Core inflation -- which strips out volatile energy and food prices and is closely watched by analysts -- rose at a slightly slower rate of 2.3 percent in March, down from 2.4 percent last month.

At its most recent meeting this month, the European Central Bank kept interest rates on hold, and warned of higher inflation and lower growth due to the war.

Economists have, however, raised their bets on the ECB hiking borrowing costs as soon as April to keep consumer price rises under control.

- Weaker economic growth? -

Meanwhile, price increases for food, alcohol and tobacco slowed slightly to 2.4 percent in March after a reading of 2.5 percent in February.

Inflation also soared in the EU's two biggest economies, Germany and France.

Consumer price rises reached 2.8 percent in Germany in March, up significantly from 2.0 percent in February. France saw inflation accelerate sharply to 1.9 percent this month, up from 1.1 percent in February.

European governments are scrambling to limit the economic damage from the war.

EU economy chief Valdis Dombrovskis last week warned the 27-country bloc would see slower growth in 2026 if energy disruptions are short-lived, but the situation could get even worse if they persist and are longer lasting.

The Organization for Economic Cooperation and Development lowered its 2026 growth forecast for the eurozone by 0.4 percentage points to 0.8 percent.

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