The building of the European Central Bank (ECB) is seen amid a fog before the monthly news conference following the ECB’s monetary policy meeting in Frankfurt, Germany Dec 15, 2022. REUTERS/Wolfgang Rattay/File photo
FRANKFURT – Euro zone consumers have slashed their inflation expectations, a European Central Bank survey showed on Tuesday, in comforting news for the ECB’s efforts to contain prices.
The Consumer Expectations Survey (CES) is used by policymakers to gauge whether households have faith in the ECB’s ability to hit its 2 percent inflation goal, which may affect their wage demands and attitude towards saving and spending.
The latest round of the poll, carried out in November, showed the median household expected prices to grow by 3.2 percent in the following 12 months, down from 4 percent a month earlier.
Expectations for inflation three years ahead also came down: to 2.2 percent from 2.5 percent.
This is likely to mirror a sharp fall in inflation in November as well as a contraction in lending as a result of the ECB’s steep increases in interest rates.