Inflation increases to 2.5% in Europe as Iran war boosts energy prices

FRANKFURT, Germany (AP) — Europe's inflation rate rose to 2.5% in March as the Iran war sent fuel prices sharply higher, official figures showed Tuesday. And that is leading analysts to pencil in interest rate increases by the European Central Bank later this year.

The annual rate for the 21 European Union member countries using the euro currency compared to 1.9% for February before the war started and blocked supplies of oil and gas from the Persian Gulf.

Energy prices increased 4.9% percent in March compared to a 3.1% decline in February, Eurostat figures showed.

The war's impact on prices has already hit home at the vast Trionfale indoor market in Rome just north of the Vatican, where vegetable stand owner Anna Caruso said the higher cost of fuel was being reflected in prices for zucchini, eggplant and fruit.

“If the price of fuel increases, those who transport will increase the general price,” she said. “With many items, they say, I can't afford this ... and shift toward the cheaper items.”

Some prices were higher due to some produce not being in season, said stand owner Paola Ianzi, “but the increase is also partially due to the war because diesel and fuel increased and those who transport fruit and vegetables need to compensate that."

Food price inflation came in at a relatively moderate 2.4% while services, a broad category ranging from medical care to haircuts, rose 3.2%.

European Central Bank head Christine Lagarde has said that businesses may be quicker to raise prices during this outbreak of inflation due to bitter memories of the last episode of higher prices in 2022, when inflation rose to double digits. Russia cut off most supplies of natural gas to Europe and oil prices rose, sending energy costs through the roof.

Iran has blocked most of the tanker traffic through the Strait of Hormuz, the waterway through which some 20% of the world's oil and gas typically passes. That is raising the prospect of sharply tighter markets for fuel in the coming weeks and months.

The expected further rise in inflation beyond the ECB's 2% target is leading analysts to predict the ECB will raise interest rates in the coming months to keep inflation from becoming ingrained in the economy through expectations of higher wages and prices for other goods. “We expect the ECB to raise rates already at the April and June governing council meetings... in order to pre-empt any de-anchoring of inflation expectations,” said Bill Diviney, head of macro research at ABM AMRO bank. Analysts at Oxford Economics also expect two interest rate hikes this year.

The ECB left its key rate unchanged at 2% at its last meeting on March 19. Higher interest rates are the chief central bank tool against inflation.

Associated Press journalist Trisha Thomas contributed from Rome.

A wrecked gar stands at a gas station in Brombach near Frankfurt, Germany, Tuesday, March 31, 2026. (AP Photo/Michael Probst)

Vegetables in a super market are pictured in Wehrheim near Frankfurt, Germany, Tuesday, March 31, 2026. (AP Photo/Michael Probst)

A woman works at the meat counter of a super market in Wehrheim near Frankfurt, Germany, Tuesday, March 31, 2026. (AP Photo/Michael Probst)

Fuel prices are listed at a gas station in Frankfurt, Germany, Monday, March 30, 2026. (AP Photo/Michael Probst)

Glenn Torshizi, whose brothers were executed by the Iranian government, joins others in a picket line at the U.S. State Department, to highlight the executions in Karaj, Iran, of People's Mojahedin Organization of Iran members, Monday, March 30, 2026, in Washington. (AP Photo/Rod Lamkey, Jr.)

The European Central Bank is seen in Frankfurt, Germany, Tuesday, March 17, 2026. (AP Photo/Michael Probst)

BERLIN (AP) — A humpback whale that has become stranded repeatedly off Germany's Baltic Sea coast in recent days got stuck again on Tuesday, authorities said, less than a day after swimming free. But rescuers were hopeful that it could still find its way out into the open sea.

The whale, which is 12-15 meters (39-49 feet) long, swam free late Monday from the spot near the German port of Wismar where it had been stuck since the weekend. It disappeared from view for hours until it was seen Tuesday morning off an island called Walfisch — as it happens, a dated German word for “whale.”

Police and the environmental group Greenpeace sent rubber boats to accompany the whale, but it turned off a course that would have taken it out of Wismar Bay and into an inlet, where it was stranded again, said Till Backhaus, the environment minister of Mecklenburg-Western Pomerania state.

Rescuers were at least able to prevent it from swimming far into the inlet, and it is once again in deep enough water that it could swim off under its own steam, Greenpeace marine biologist Thilo Maack said at a televised news conference.

An effort last week to rescue the whale from a shallow underwater sandbank at Timmendorfer Strand, a resort town around 50 kilometers (over 30 miles) from its current location, eventually succeeded with the help of an excavator.

But the apparently exhausted whale was soon in trouble again, albeit in somewhat deeper water. On Tuesday, officials were again banking on giving it peace and quiet to gather enough strength to swim away, and possibly approaching it with boats to motivate it to set off.

The drama captivated Germans, with media sending detailed updates on its progress.

Even if it swims off again, the whale is still far from its natural habitat.

“Our aim is (for it to get) out of Wismar Bay, into the Baltic Sea, through Danish waters into the North Sea, and then into the Atlantic where the whale belongs,” Maack said. “These animals are designed for depths that are beyond anything found anywhere in the Baltic Sea.”

The whale was first spotted swimming in the region on March 3. It is not clear why the whale swam into the Baltic Sea. Some experts say the animal may have lost its way when it swam after a shoal of herring, or during migration.

No tracker has been attached to the whale because its skin is in a poor state after long exposure to the relatively low salt concentration of the Baltic. Even to reach the North Sea, it faces a journey of several hundred kilometers (miles).

Backhaus said a check on the whale's health Monday had shown that “it has potential.”

“Of course it is sick, all of us know that, and what other internal problems it has we don't know,” he added. But “I am still keeping my fingers crossed and I hope that we will still have a good ending.”

Three water birds sit on a humpback whale in the Wismar Bay near Wismar, Germany, Sunday, March 29, 2026. (Philip Dulian/dpa via AP)

A police inflatable boat approaches a humpback whale lying in the Bay of Wismar, Germany, Monday, March 30, 2026. (Philip Dulian/dpa via AP)