(Bloomberg) -- Inflation expectations of consumers in the euro area increased in November, the European Central Bank said.
Prices were seen rising 2.6% over the next 12 months, up from 2.5% in October, according to its monthly survey of households released in Frankfurt on Tuesday. The gauge for three years ahead also climbed, reaching 2.4% — notably higher than the ECB’s 2% goal.
Expectations about future price developments help shape inflation, with policymakers still looking for more evidence that their target will be met sustainably sometime this year, as currently planned.
Data this week has already showed that consumer-price growth in Germany and France accelerated in December. Analysts reckon the reading for the 20-nation euro zone, due later Tuesday, will tick up to 2.4%, due mostly to base effects that will soon fade.
There’s unlikely to be much concern among ECB policymakers, who are readying further rate cuts after four quarter-point moves in 2024. Greece’s Yannis Stournaras said last week that the deposit rate, now at 3%, should reach about 2% around the autumn.
The ECB’s survey showed consumers becoming slightly more pessimistic on the economy, foreseeing a 1.3% contraction over the next 12 months compared with a 1.1% retreat previously.
The poll also showed:
- Expectations for the unemployment rate 12 months ahead increased to 10.6% from 10.4%
- Nominal incomes are seen growing 1.1%, matching previous expectation
- Expectations for nominal spending growth over the next year increased to 3.5% — the highest since April
- Consumers expect the price of their home to increase by 2.9% over the next 12 months compared with 2.8% before
- Expectations for mortgage interest rates stayed unchanged at 4.6%
--With assistance from Barbara Sladkowska.
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