The European Central Bank said consumers' inflation expectations for one to three years ahead have fallen, according to results from the ECB's latest survey, compared to previous data presented in October 2022.

The ECB noted that the sustained rise in consumer-perceived inflation over the previous 12 months had stopped, with the average rate remaining at 9.9%.

Inflation expectations remained well below the perceived past rate of inflation, especially over a medium-term horizon of three years.

ECB: Eurozone wages will rise significantly in the short term amid inflation

Average expectations for inflation over the next 12 months fell from 5.4% to 5.0%, while expectations for consumer inflation three years ahead fell from 3.0% to 2.9%, edging slightly towards the medium-term target of ECB from 2 percent.

The ECB said uncertainty about inflation expectations a year ahead has been relatively stable since July 2022, although it remains well above the level prevailing before the war in Ukraine.

At the same time, consumers expect their nominal income to grow by 0.9% over the next 12 months, up from last October's expectation of 0.7% growth.

For the first time since mid-2021, expectations for nominal spending growth over the next 12 months fell to 4.3% from 4.7% in October, according to the latest ECB survey.

Perceptions of nominal spending growth over the previous 12 months remained unchanged at 6.3%.

According to the latest ECB survey, expectations for economic growth in the euro area over the next 12 months increased from -2.6% in October to -2.0%.

In line with higher expectations for economic growth, expectations for the unemployment rate over the next 12 months fell to 12.4% from 12.5% ​​in October.

Consumers continue to expect the future unemployment rate to be higher than the perceived current unemployment rate of 11.8%.

Consumers also expect house price growth over the next 12 months to remain relatively steady at 3.1%.

Expectations for 12-month mortgage rates, however, rose further to 4.8%, up 1.5 percentage points from early 2022.

ECB

users

inflation