Overview
- Euro-zone consumers lifted expected inflation to 4.0% for the next year and 3.0% three years out, both above the European Central Bank’s 2% goal.
- Views five years ahead barely shifted to 2.4%, suggesting long-term expectations remain steadier than near-term ones.
- The jump follows an energy price shock tied to the war in Iran, which has pushed up oil costs across the region.
- The ECB is expected to hold rates at its coming meeting and keep the option of hikes if higher energy costs feed into wages and prices.
- Consumers now foresee a 2.1% drop in growth over the next year, with income expectations flat and planned household spending rising to 5.1%.