Euro zone consumers see inflation edge up slightly, ECB survey shows

FRANKFURT (Reuters) – Euro zone inflation expectations for the year ahead edged up slightly in October and stayed steady for three years out, the European Central Bank’s monthly Consumer Expectations Survey showed on Friday.

Median inflation expectations for the next 12 months picked up to 2.5% from 2.4% previously while expectations for three years ahead remained unchanged in at 2.1%, the ECB, which targets price growth at 2%, said after surveying around 19,000 adults in 11 euro zone countries.

Consumer expectations have been dropping steadily for years in line with the slowdown in overall price growth and indicate that consumers largely believe the ECB’s narrative that victory over runaway inflation is within sight.

Consumers, however, became more pessimistic on growth, as expectations for the next 12 months fell to -1.1% from -0.9% seen in September, the ECB added.

In line with this growing pessimism, nominal income growth expectations decreased to 1.1% from 1.3%, the survey showed.