Trade war could cut euro zone inflation further, ECB scenarios show

FRANKFURT (Reuters) -The outcome of the global trade war could meaningfully alter the euro zone’s inflation path, the European Central Bank said on Thursday as it outlined several scenarios to its central view.

In a mild scenario, inflation would average 1.7% next year, above the 1.6% projected by the bank while a severe scenario, which foresees a further increase in U.S. tariffs and retaliation by the EU, would cut inflation to 1.5% next year and 1.8% in 2027.

(Reporting by Balazs KoranyiEditing by Alexandra Hudson)