Inflation expectations are creeping up, according to the European Central Bank’s (ECB) latest household survey.
While expectations for economic growth and household incomes remain flat in the ECB’s latest monthly survey of consumers — which was carried out between Aug. 6 and 24 — inflation expectations ticked up.
The ECB reported that the median rate of perceived inflation over the past 12 months remained stable at 3.5% in the latest survey, but that the median expectation for inflation in the next 12 months increased to 3% from 2.9%.
Additionally, median expectations for inflation of the three- and five-year time horizons also increased. Over the next three years, inflation is now expected to come in at 2.9%, up from previous expectations of 2.7% — and, median expectations for inflation five years down the road also increased to 2.5% from 2.4%, the ECB said.
“Uncertainty about expectations for inflation over the next 12 months decreased, but remained higher than the level prevailing before the start of the conflict in the Middle East,” the ECB reported.
At the same time, the survey found that consumers’ expectations for nominal income growth over the next 12 months was unchanged at 1%, expectations for economic growth were also unchanged at -1.2% in August — and, expectations for mortgage rates in 12 months remained at 4.9%, it noted.