Original Source
Iran War's Energy Shock Shrinks Real Purchasing Power in Developed Nations
Iran War's Energy Shock and Declining Purchasing Power
The Iran War has triggered an energy shock, intensifying global inflationary pressures. Workers in developed nations, including the United States and the United Kingdom, are facing a situation where wage growth cannot keep pace with price increases, leading to a continuous decline in their real purchasing power. Experts warn that this phenomenon is unlikely to improve in the short term and could evolve into structural problems within the labor market.
Impact on Key Countries and Expert Analysis
In the United States, April's inflation rose by 3.8% year-on-year, while average hourly wages increased by only 3.6%, marking the first time in two years that price inflation outpaced wage growth. KPMG US Chief Economist Swank noted that even if the Strait of Hormuz reopens, the war has already disrupted supply chains, likely keeping prices high for an extended period. The United Kingdom is experiencing similar pressures. The Eurozone, having just recovered from the 2022 inflation crisis, now faces another energy shock. Pantheon Macroeconomics economist Vistisen projects near-zero real wage growth for the Eurozone in 2026, with countries like France potentially seeing significant negative growth.
*Source: UDN (2026-05-26)*
Related Articles
📧 Daily Newsletter
Get the daily global news briefing in your inbox every morning.
It's still free.