“Mood Has Shifted” – Food Prices Set to Rise as Markets Reel

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The situation on global financial markets has deteriorated sharply in recent weeks. “The mood has shifted,” says Nils Kottke of Bankhaus Spängler. After a strong start to the year, the Iran war has fueled massive uncertainty since March.

Energy Prices Surge Amid Hormuz Blockade

The impact is most visible in energy markets. “In March alone, the price of Brent crude jumped by more than 60 percent—the strongest monthly increase in nearly 40 years,” explains Markus Dürnberger of the private bank Spängler. The spike is driven by the blockade of the Strait of Hormuz, a crucial shipping route for global oil supply.

For companies, this means rapidly rising costs. And ultimately, consumers will feel the effects in everyday life.

Inflation Pressures Intensify Across Europe

Inflation is picking up again. In the eurozone, expectations have climbed above three percent. Europe is particularly vulnerable because many countries rely heavily on energy imports.

“On top of that, production costs for companies are rising, and they will pass these on to customers. Food prices are also likely to increase,” says Dürnberger.

Central Banks Under Pressure

The renewed inflation surge is putting central banks in a difficult position. The European Central Bank is expected to raise interest rates several times this year. The U.S. Federal Reserve, however, is holding steady for now—rate cuts in the United States are no longer on the table.

Economic Outlook Darkens

The broader economy is also losing momentum. According to recent surveys, investors in the eurozone now expect a recession. In the United States, at minimum, stagnation looms. Higher flight prices could further strain the tourism sector—cities such as Vienna and Salzburg may have to prepare for fewer visitors.

Markets Slide, Then Recover—But Uncertainty Remains

Stock markets reacted swiftly. Emerging-market equities fell around eleven percent in March, while European stocks dropped roughly eight percent. A brief recovery followed the ceasefire in early April, but volatility remains high.

A notable shift is also emerging across sectors. Energy stocks are benefiting from the turmoil, while technology and consumer goods companies are under pressure. Even gold—typically a safe haven in turbulent times—has recently posted losses.