ECB survey shows rising inflation expectations despite energy price falls By Reuters
Economy 13 minutes ago (Feb 07, 2023 04:36AM ET)
(C) Reuters. FILE PHOTO: A person uses a petrol pump, as the price of petrol rises, in Lisbon, Portugal, March 7, 2022. Picture taken March 7, 2022. REUTERS/Pedro Nunes
FRANKFURT (Reuters) – Euro zone consumer expectations for inflation edged up again in December, a European Central Bank survey showed on Tuesday, indicating that recent interest rate hikes and falling energy prices have not yet tempered price growth fears.
Inflation peaked at over 10% in October but has been in rapid decline since on lower gas prices, even if underlying price growth is still inching up.
Median inflation expectations over the next three years rose to 3% in December from 2.9% a month earlier, the ECB said based on a survey of about 14,000 adults in six of the euro zone’s biggest countries. But median expectations over the next 12 months held steady at 5%.
The ECB has raised rates by 3 percentage points since July and promised another 50 basis point move in March, looking to restrict the economy enough to tame inflation expectations.
The problem is that when expectations stay high, workers and businesses adjust their wage-setting behaviour, entrapping rapid price growth and making it harder for the ECB to get back to its 2% target.
The survey also showed a moderate improvement in growth and wage expectations and slightly reduced expectation for unemployment.
ECB survey shows rising inflation expectations despite energy price falls
Terms And Conditions
(C) 2007-2023 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.