Inflation expectations rise in the euro area

While inflation has risen this year driven by high energy and food prices, the European Central Bank (ECB) raised interest rates at a record pace to lower long-term inflation expectations.

The median inflation expectation for the next 12 months rose to 5.4 percent in October, from 5.1 percent in September, according to the survey released today by the ECB, with the participation of approximately 14,000 people from six countries with the largest economies in the Eurozone.

According to the survey, inflation expectations three years from now were stable at 3 percent.

AUTUMN IS EXPECTED TO PICK UP IN 2023

Although inflation fell to 10 percent this month after reaching a record high of 10.6 percent in October, the decline in early 2023 is expected to be slow, with disinflation picking up only in the second half of the year.

The increase in inflation expectations came at a time when consumers took a pessimistic outlook on economic growth and employment.

Growth expectations for the next 12 months fell to minus 2.6 percent from minus 2.4 percent in September, with estimates of rising unemployment and rising incomes below inflation. (AA)