European Inflation Expectations Ease Over Next Few Years

Financial forecasters expect inflation to ease over the next few years in Europe. According to the European Central Bank's Survey of Professional Forecasters, headline HICP inflation expectations were broadly unchanged from the previous round for 2026.

However, core inflation, measured by the HICPX, was revised upwards only for 2027 and 2028.

Headline inflation is expected to decrease from 2.7% in 2026 to 2.2% in 2027 and 2.0% in 2028, while longer-term HICP inflation expectations remain unchanged at 2.0% for 2031.

The survey also found that respondents expect real GDP growth of 0.6% in 2026, 1.2% in 2027, and 1.3% in 2028.