Euro-Area Consumers Slash Inflation Expectations Amid Oil Price Spike

The European Central Bank (ECB) has reported a sharp decline in consumer price expectations among euro-area consumers for the next year, according to its latest survey. The poll, conducted from June 4-29, showed that inflation expectations fell to 3% from 3.5% in May. This is significant because it predates the recent oil price spike triggered by the Middle East conflict.

The three-year gauge, which is more important for setting monetary policy, slipped to 2.8% from 2.9%. The ECB's decision to hold interest rates recently was made with this data in mind, and President Christine Lagarde laid the groundwork for a possible hike in September.

Another survey of corporate telephone exchanges between June 22 and July 1 found that businesses reported a less pronounced increase in selling prices than expected. They also forecast a slight moderation in price growth between July and September.