Inflationary pressures are mounting on opposite ends of the global economy, with the eurozone recording its highest price growth in nearly three years and Iran grappling with a far more severe surge that has pushed official rates well above 50 per cent and left several provinces in triple-digit territory.

Data released by Eurostat on Tuesday showed consumer prices across the 20-nation bloc advanced 3.2 per cent year-on-year in May, up from 3.0 per cent in April and the strongest reading since September 2023. The acceleration was driven largely by energy, where inflation reached 10.9 per cent amid the disruption to shipping through the Strait of Hormuz linked to the Middle East conflict. Core inflation, which strips out food and energy, picked up to 2.5 per cent, while services prices climbed to 3.5 per cent, reinforcing expectations that the European Central Bank will hold interest rates at elevated levels when it meets next week.

Viewed from Tehran, the picture is incomparably worse. A delayed report from the Statistical Centre of Iran showed the official annual inflation rate hit 57.7 per cent in Ordibehesht, the second month of the Iranian calendar, breaking a multi-decade record for the third straight month. More alarming still, the inflation felt by households is estimated to be roughly 1.5 times the official measure. Food prices have been hit with devastating force: the cost of imported rice and chicken has more than tripled over the past year, while cooking oil and eggs have quadrupled. Disaggregated provincial data reveal the uneven burden: in Ilam, Kurdish, Kermanshah and Lorestan provinces, point-to-point inflation exceeded 100 per cent, while the capital Tehran – at 69.5 per cent – had the lowest rate in the country.

For European policymakers, the challenge is to sustain the fight against inflation without tipping the economy into stagnation. Analysts in London note that May’s data make a near-term rate cut unlikely, especially with services inflation proving stubborn. Iran, by contrast, has little room for conventional monetary response; its inflation is structurally embedded, compounded by international sanctions and chronic fiscal imbalances. The contrast between the two regions underscores how the same global energy shock is producing vastly different outcomes depending on domestic institutions and policy buffers, leaving ordinary citizens in Iran to bear a far heavier cost.