ECB Says Consumer Inflation Expectations Have Fallen Back
While likely to come as a relief to the ECB, officials remain committed to raising rates beyond the current level of 2%.
Consumer expectations for inflation over the next 12 months eased for the first time since May 2022, according to a monthly survey by the European Central Bank.
The retreat, which follows the most aggressive bout of interest-rate increases in the ECB’s history, also equals the steepest since the data series began in April 2020. The poll was conducted in November, when euro-zone inflation slowed for the first time in 1 1/2 years.
- Expectations for the next 12 months declined to 5% from 5.4% in October
- Expectations for inflation in three years also eased, to 2.9% from 3%
- Expectations for economic growth for the next 12 months improved to -2% from -2.6%
The results chime with separate figures from the European Commission, which found that the level of concern over the path for prices has largely receded back to its long-term norm in the bloc’s biggest economies.
While likely to come as a relief to the ECB, officials remain committed to raising rates beyond the current level of 2% as their focus switches to underlying inflation. That gauge hit a record high last month as higher energy costs and wages slowly feed through.
Consumers are still worried about the dangers of soaring prices. The rising cost of living is the top concern for euro-area citizens, according to the latest Eurobarometer survey, published this month. That puts it ahead of poverty, climate change and the spread of the war in Ukraine to other countries.
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