Euro zone consumers expect lower
inflation, sluggish housing prices - ECB poll
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[August 08, 2023]
FRANKFURT (Reuters) - Euro zone consumers expect inflation to
keep slowing in the next months and years but remain pessimistic about
their purchasing power and house prices, a European Central Bank survey
showed on Tuesday. |
A view shows the logo of the European
Central Bank (ECB) outside its headquarters in Frankfurt, Germany March
16, 2023. REUTERS/Heiko Becker/File Photo |
The
ECB's monthly Consumer Expectations Survey added to evidence
that the central bank's steepest ever streak of interest rate
hikes was slowly starting to succeed in preventing the current,
high rate of inflation from taking root in people's minds.
The median respondent in the June edition of the survey expected
inflation to average 3.4% over the next 12 months, down from
3.9% a month earlier and extending a decline that started in
late 2022 as actual price growth began to slow.
Consumers also cut their expectations for inflation three years
ahead to 2.3% from 2.5% in May - inching closer to the ECB's 2%
target.
The survey also showed that consumers continued to expect their
income to grow much more slowly - at 1.2% - than inflation and
spending over the next 12 months, implying an expected lowering
of living standards and savings.
The mean respondent was also as pessimistic as they have been in
the past two years about housing prices, which they expected to
grow by just 2.1% over the next year.
An article accompanying the survey showed that households'
perceptions about housing have deteriorated markedly since
mid-2021 due to expectations of higher mortgage rates and
inflation as well as lower economic growth.
(Reporting By Francesco Canepa; Editing by Andrew Heavens)
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