ECB: Long-Term Consumer Inflation Expectations Edge Upwards
7 February 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank’s Consumer Expectations Survey results for December 2022, released on Tuesday, show consumers’ long-term inflation expectations rising slightly, whilst their outlook for the immediate term remains high.
The survey results showed that consumer expectations for inflation three years ahead rose from 2.9% to 3.0%, reversing a decline in the November survey. Meanwhile, expectations for inflation 12 months ahead were unchanged at 5.0%. For the third month in a row, the median rate of perceived inflation over the past 12 months remained at 9.9%.
Uncertainty about inflation expectations for the next 12 months eased compared to levels since mid-2022, the ECB said.
The survey, based on some 14,000 responses from Belgium, Germany, Spain, France, Italy and the Netherlands, also showed overall expectations for nominal income growth 12 months ahead at 1.0% in December, an increase from 0.9% in November. Expectations for nominal spending growth over the next year declined from 4.3% to 4.2%.
Economic growth expectations increased noticeably, the ECB said, moving from -2.0% over the next 12 months in November to -1.5%. This increase was accompanied by a decline in expectations for the unemployment rate, which dropped from 12.4% in November to 11.9%. However, consumers still expect the future unemployment rate to be higher than the perceived current rate of 11.6%, the ECB noted.
Consumers expect the growth in house prices to continue at around 3.0% over the next 12 months, and expectations for mortgage interest rates remained stable at 4.8%.
Perceptions of access to credit over the previous 12 months and expectations for access to credit over the next 12 months remained unchanged compared with November, the results showed.