Inflation projected at 4.2 percent amid Iran war fears

Inflation is projected at 4.2 percent this year amid economic concerns surrounding the U.S.-Israeli conflict against Iran, according to the Organisation for Economic Co-operation and Development (OECD).

In a new report, the OECD made 2026 inflation projections for multiple countries, with the United Kingdom at 4 percent, Japan at 2.4 percent, Canada at 2.4 percent and the U.S. at 4.2 percent.

“The evolving conflict in the Middle East has human and economic costs for the countries directly involved, and will test the resilience of the global economy,” the OECD report reads.

“A halt in shipments through the Strait of Hormuz and the closure or damage of energy infrastructure has generated a surge in energy prices and disrupted the global supply of energy and other important commodities, such as fertilisers,” it continues.

The conflict, which has had notable economic consequences globally, is nearing a month in length. The current average price for a regular gallon of gas in the U.S. is about $3.98, up about a dollar from last month, according to AAA.

Despite a recent push for a ceasefire, the war shows no signs of slowing down.

Early Thursday, President Trump alleged that Iranian negotiators were “begging” to come to a deal with the U.S. after the Iranians put forward their peace plan and shot down the Trump administration’s 15-point deal.

“The Iranian negotiators are very different and ‘strange,’” Trump wrote on Truth Social. “They are ‘begging’ us to make a deal, which they should be doing since they have been militarily obliterated, with zero chance of a comeback, and yet they publicly state that they are only ‘looking at our proposal.’”

According to data released earlier this month by the Labor Department, the annual inflation rate stayed even in February, prior to the conflict in Iran increasing energy prices. Consumer prices went up by 0.3 percent last month and are up 2.4 percent in comparison with last year.