Euro zone consumers hopeful of slowing inflation – ECB survey

FRANKFURT (Reuters) – Euro zone consumers lowered their inflation expectations for the next 12 months and three years in April, a fresh European Central Bank survey showed on Tuesday, an event that would relieve policymakers after an unexpected surge a month earlier.

Inflation has slowly come down from double-digit territory last autumn but it could still take until 2025 for prices to fall back to the ECB’s 2% target as underlying pressures appear stubborn, driven by the fastest nominal wage growth in years.

Median expectations for inflation over the next 12 months fell to 4.1% in April from 5.0% in March, while for three years ahead, they dropped to 2.5% from 2.9%, the ECB said, based on a monthly survey of 14,000 adults in the euro zone’s biggest countries.

“Thus, the increases observed in March have largely been reversed,” the ECB said.

“Inflation perceptions and expectations continued to be closely aligned across income classes, with younger respondents reporting lower inflation perceptions and expectations and sharper declines than older respondents,” the ECB said.

Consumers also saw more modest wage growth ahead, reduced their unemployment expectations and were less pessimistic about the bloc’s growth prospects, even if they still saw a contraction ahead.

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