ECB Consumer Expectations Survey: Inflation Expectations Rise Across All Horizons

The European Central Bank's (ECB) Consumer Expectations Survey for August showed a rise in inflation expectations across all three horizons. The one-year expectation increased to 3.0%, up from 2.9% previously, while the three-year expectation rose to 2.9%, up from 2.7%. The five-year expectation also climbed to 2.5%, up from 2.4%. This uptick in expectations cuts against the ECB's anchoring narrative and could be a concern for policymakers.

The survey's results are significant because they can influence the ECB's decision-making process. While a single uptick is not uncommon, a run of consecutive increases would carry more weight with the doves. The interaction between these expectations and negotiated wage data will also be crucial in determining the ECB's next move.