US-Iran Deal Stirs Diplomatic Tensions and European Economic Concerns

Iranian Foreign Minister Abbas Araghchi warned that negotiations with the United States will not commence under continued threats, citing paragraph 13 of the recently signed Memorandum of Understanding (MOU). He said Iranian forces would not be intimidated by U.S. statements and called on Washington to honor its signature. The minister noted that a technical delegation from Iran, led by Interior Minister Eskandar Momeni, is slated to travel to Pakistan for talks in Islamabad on July 14‑15, with Pakistani mediation.

S&P Global Ratings said the U.S.–Iran MOU is only a first step toward regional stability, but significant uncertainty remains about the conflict’s duration and its impact on commodity prices, supply chains and credit conditions. The agency highlighted the risk of renewed disruptions in the Strait of Hormuz, which could pressure European consumer and retail margins, dampen discretionary spending and sustain higher inflation and interest rates. S&P raised its euro‑area and UK inflation forecasts through 2027, trimmed growth outlooks and foresees a modest rise in unemployment, underscoring lasting indirect economic effects despite the MOU’s limited direct impact on sector ratings.