ECB Survey: Inflation Expectations Unchanged, Economic Growth Lukewarm

The European Central Bank's (ECB) survey on inflation expectations shows that price growth is expected to decline quickly next year before returning to its 2% target in 2028. The ECB has been monitoring inflation, which has been running at about 3% due to surging energy costs.

According to the survey, inflation averaging 2.7% this year remains unchanged from the previous projection, while the 2027 figure was raised to 2.2% from 2.1%. Inflation is expected to hit 2% in 2028 and stay there, the survey showed.

The ECB left interest rates unchanged on Thursday as the energy price surge has yet to generate second-round effects that could perpetuate rapid inflation, but it hinted at more tightening ahead, possibly as soon as September. The bank also stayed on hold due to lukewarm economic growth, with this year's growth seen at 0.6%, below the 1.0% projected three months earlier.