Euro-area consumers exhibit slightly enhanced anticipations regarding price increases.
Expectations for medium-term consumer inflation in the Eurozone have slightly risen, as per an ECB survey. On the average (median), folks anticipated a 2.4% inflation rate over a three-year timespan in July, as reported by the ECB on Friday in Frankfurt.
In the June survey, they predicted a 2.3% rate. Over a one-year span, consumers projected a 2.8% inflation rate in July, which is the same as in June and May, marking the lowest projection since September 2021.
In the 20-member union, inflation has seen a minor upward tick once more. Consumer prices increased by 2.6% in July, following a 2.5% increase in June. The ECB's desired rate for the medium term is 2.0%, which they consider ideal for the Eurozone. The central bankers initially decreased interest rates in early June, but left them unchanged at their July meeting. Most economists predict the ECB to loosen monetary policy again in September, with market probabilities now exceeding 98%.
The slight increase in medium-term consumer inflation expectations can be attributed to the actions of ordinary consumers in the Eurozone. Despite this rise, the projected inflation rate over a one-year period remains the same for consumers, at 2.8%, indicating cautious optimism.
