Eurozone Consumers Eases Inflation Expectations Amid Steady Spending Growth

According to a recent survey conducted by the European Central Bank (ECB), consumers in the Eurozone have eased their inflation expectations at both short and medium horizons. The median rate of perceived inflation over the previous 12 months decreased to 3.5 per cent in July from 3.6 per cent in June, while median expectations for inflation over the next 12 months fell to 2.9 per cent from 3 per cent.

The survey also showed that lower-income quintiles continued to report higher inflation perceptions and expectations than higher-income quintiles. Younger respondents aged 18-34 reported lower inflation perceptions and expectations than those aged 35-54 and 55-70.

For consumer-facing textile and apparel businesses, the income and spending readings point to a steadier but still constrained retail demand backdrop. Consumers' expectations for nominal income growth over the next 12 months decreased to 1.0 per cent from 1.1 per cent in June, while perceived nominal spending growth over the previous 12 months was unchanged at 5.1 per cent.