Inflation expectations are as low as they have been in almost three years
Consumer inflation expectations in the Eurozone remain at the lowest level since nearly three years according to a survey by the European Central Bank (ECB). On average (median), consumers expected inflation to be at 2.8% within twelve months in June, as reported by the ECB.
Consumers had also expected the same inflation rate for the next twelve months in May. Their expectations have not been this low since September 2021. In the twenty-country union, inflation had decreased slightly in the latest data. Consumer prices rose by 2.5% in June, compared to 2.6% in May. The ECB's target of an inflation rate of 2.0%, which it considers the optimal level for the economy, is no longer far off.
Currency traders had lowered interest rates for the first time since almost five years at the beginning of June. However, they kept their feet still at their meeting last week. Economists now expect the ECB to ease monetary policy again in September, should published economic data allow it.
The monthly data on consumer inflation expectations provide important information on the inflation picture in the monetary union for the Euroguardians. Approximately 19,000 people from eleven Euro countries, including Germany, France, and Italy, participate in the regular survey.
In the three-years-perspective, inflation expectations among Eurozone consumers remain at their lowest level since nearly three years, as reported by the ECB. This low expectation was last seen in September 2021, indicating a prolonged period of subdued inflation expectations.
