Consumer expectations for inflation in the Eurozone over the next year rose "significantly" in September, which explains why the ECB plans to keep interest rates high longer. The bank revealed that inflation expectations for the next 12 months increased to 4 percent compared to 3.5 percent before, as uncertainties surrounding the outlook exacerbated. Nevertheless, inflation expectations for the next three years remained unchanged at 2.5 percent.
The ECB survey comes after a summer in which inflation remained above 5 percent in the 20-nation Eurozone. However, it has since fallen with consumer prices in October up just 2.9 percent from a year ago, down from highs above the 10 percent threshold, and very close to the official inflation target of 2 percent.
Source (Bloomberg Agency, Edited)
