Euro Zone Consumers Boost Inflation Expectations Amid Fuel Price Spike

A recent survey by the European Central Bank found that consumers in the euro zone have increased their inflation expectations. The median respondent in the ECB's Consumer Expectations Survey saw prices growing by 3.0% over the following 12 months, up from 2.9% in July.

This increase is likely due to a new spike in fuel prices caused by the deepening Iran conflict. The expectation for inflation three years ahead increased to 2.9% from 2.7%, and the five-years-ahead forecast rose to 2.5% from 2.4%.

The ECB raised borrowing costs last week, marking its second increase this year. Sources close to the bank have indicated that policymakers expect further policy tightening in the months ahead.