The European Central Bank warns that eurozone inflation could surge to 6.3% in the first quarter of 2027 under a severe geopolitical scenario involving Iran. This projection, detailed in internal ECB documents, represents a significant upward revision from previous forecasts and signals heightened economic risks. The 6.3% peak would mark the highest inflation rate since the early 1990s, potentially forcing the ECB to maintain aggressive interest rate hikes longer than currently anticipated. Iran-related supply chain disruptions are cited as a primary driver, though the ECB notes this scenario remains a "severe case" rather than a baseline expectation.