Eurozone consumers raise inflation expectations across all horizons: ECB

Eurozone consumers raised their inflation expectations across all time horizons in August, according to a European Central Bank (ECB) survey released Friday.

Median inflation expectations for the next 12 months increased to 3% from 2.9% in July, the ECB’s Consumer Expectations Survey showed.

Expectations for inflation three years ahead rose more sharply to 2.9% from 2.7%, while the five-year outlook climbed to 2.5% from 2.4%.

The median rate of inflation perceived by consumers over the previous 12 months, meanwhile, remained unchanged at 3.5%.

Uncertainty surrounding expectations for inflation over the next year declined but remained above the level recorded before the outbreak of the conflict in the Middle East, the bank said.

Respondents in the lowest income group continued to report higher inflation perceptions and expectations than those in the highest income group. Consumers aged 18 to 34 also reported lower expectations than older respondents.

Expectations for nominal income growth over the next 12 months remained unchanged at 1%, while anticipated spending growth held at 3.6%.

Consumers’ assessment of their spending growth over the previous year edged up to 5.2% from 5.1%.

Economic growth expectations for the coming 12 months remained at minus 1.2%, while the expected unemployment rate declined to 11% from 11.2%.

The survey also showed that consumers expected home prices to increase by 3.4% over the next year, while anticipated mortgage rates remained unchanged at 4.9%.

The ECB conducted the survey between Aug. 6 and 24 among approximately 19,000 adults in 11 euro-area countries.