Euro zone consumers raise inflation expectations – ECB survey
2023.05.11 04:56
© Reuters. FILE PHOTO: A woman carries plastic bags with fruits and vegetables at a fruit store in Ronda, Spain, March 14, 2023. REUTERS/Jon Nazca/File Photo
FRANKFURT (Reuters) -Euro zone consumers raised their inflation expectations in March for the first time since the autumn, even as the rate of price growth fell and the European Central Bank kept raising interest rates, an ECB survey showed on Thursday.
The median respondent in the latest Consumer Expectation Survey saw prices growing by 5.0% in the coming 12 months, up from 4.6% in the previous survey round in February, the first increase since October.
Longer-term expectations also increased sharply, with inflation three years ahead seen at 2.9% after a 2.4% reading a month earlier.
These rises are an unwelcome development for an ECB that is trying to stop the current high rate of price growth from becoming entrenched.
The ECB decided to slow the pace of its interest rate increases last week but signalled more tightening to come in what markets expect to be the final stage of its fight against inflation.
The survey showed consumers expected their income to stagnate over the coming 12 months with spending seen increasing by 3.0%, implying a decrease in savings.
The CES is a monthly online survey of around 14,000 adults from Belgium, Germany, Spain, France, Italy and the Netherlands. It is one of the inputs used by ECB policymakers in their deliberations.
