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Inflation came down rapidly last year and now stands just below
3%, but the ECB said it could take more than another year to get
it down to its 2% target, despite a record string of interest
rate hikes and anemic economic growth.
Median expectations for inflation over the next 12 months rose
to 3.3% in January from 3.2% December, while expectations for
three years ahead remained unchanged at 2.5%, the ECB said,
based on a survey of 19,000 adults in 11 euro zone countries.
Although energy prices are well below expectations and growth is
weak, wage growth remains quick and policymakers have repeatedly
said they need more comforting labor market data before they can
sound the all clear and start cutting rates.
The survey showed that expectations for nominal income growth
remained unchanged at 1.2%, but consumers persistently
underestimate wage growth and the ECB expects compensation per
employee to rise by 4.6% this year.
Consumers continued to expect slightly negative economic growth
ahead but reduced their unemployment expectations.
(Reporting by Balazs Koranyi; Editing by Andrew Heavens)
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