Euro-Area Inflation Expectations Inch Down Amid War Uncertainty

The European Central Bank released its latest survey on inflation expectations among consumers in the euro-area. According to the report, their median expectations for inflation over the next 12 months decreased from 3.0% in June to 2.9% in July. Similarly, their median expectations for inflation three years ahead declined from 2.8% to 2.7%. However, their median expectations for inflation five years ahead remained unchanged at 2.4%.

Lower-income respondents continued to report higher inflation expectations than higher-income respondents, while younger respondents reported lower inflation expectations compared to older respondents. The survey also found that uncertainty about expectations for inflation over the next 12 months was unchanged and remained higher than before the start of the war in the Middle East.