FRANKFURT (Reuters) – Consumers’ one-year and three-year inflation expectations in the euro zone remained stable last month, while the outlook for economic growth worsened, a new survey released by the Bank shows European Central (ECB) on Tuesday.
The ECB has raised its interest rates ten times since July 2022 to bring its deposit rate to the record level of 4.0% in the euro zone. However, it indicated during its last monetary policy meeting, where it opted for a status quo on the cost of credit, that rates would remain stable over the coming months, suggesting that a reduction in the cost of money would constitute his next big decision.
Markets are currently pricing in an ECB rate cut in March and a total reduction of 143 basis points in the cost of credit in 2024.
The median expectation of rising inflation in the next 12 months among euro zone consumers remained at 4.0% in November, as in October.
Consumer inflation expectations in three years also remained stable, at 2.5%.
However, these two rates are still above the medium-term inflation objective of 2% set by the ECB.
Regarding economic growth forecasts for the next 12 months, consumers in the bloc expect a more pronounced contraction, at -1.3% compared to -1.2% in the October survey.
(Reporting Balazs Koranyi; Claude Chendjou, edited by Blandine Hénault)
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