The onset of the war in the Middle East triggered a sharp deterioration in consumer confidence across the euro area, comparable in magnitude to that observed after Russia’s invasion of Ukraine. This box examines the extent to which the decline in confidence is associated with actual consumption behaviour using microdata from the ECB Consumer Expectations Survey. The analysis reveals that nominal consumption growth softened materially in April 2026, driven mainly by reduced discretionary spending, particularly among higher-income households.

The dense smoke that settled over Attica in recent days captured, with brutal clarity, the scale of the destruction Greece is facing this summer due to an extensive outbreak of wildfires.

Internal divisions over whether to raise interest rates intensified at Kevin Warsh’s second meeting as chairman of the Federal Reserve.

John Geanakoplos and David E. RappoportThe Credit Surface along the leverage dimension gives the bond spread as a function of the loan-to-value ratio. Empirically, we show that uncertainty shocks typically increase spreads and steepen the credit surface, profoundly affecting the supply of credit. Theoretically, we derive necessary and sufficient conditions for the convexity of the credit surface, and for changes in the anticipated distribution of collateral prices that lead to steepening of the credit surface.