Euro zone inflation expectations remain unchanged for 3rd consecutive month

By Sahika Malkoc

ISTANBUL (AA) - Euro zone consumers' inflation expectations for the next year held steady for the third consecutive month, according to the European Central Bank's (ECB) latest survey of consumer expectations released on Friday.

"Median inflation expectations for the next 12 months remained unchanged at 2.8% for the third month in a row, after dropping to their lowest level since September 2021 in May," the ECB reported.

However, median expectations for inflation three years ahead saw a slight increase, rising by 0.1 percentage points to 2.4% in July.

Perception of inflation over the past 12 months decreased to 4.1% in July. At the same time, the percentage of consumers who reported applying for a loan in the last three months increased from 16.8% in April to 17.2% in July.

In terms of income and spending, expectations for nominal income growth dropped to 1.1% in July, while expectations for nominal expenditure growth declined slightly to 3.2%. The perception of expenditure growth over the last 12 months increased to 5.4%.

The survey also highlighted that consumers continued to anticipate a slight increase in the unemployment rate. Expectations for the unemployment rate one year ahead remained stable at 10.6% in July, compared to the current rate of 10.1%.

Lastly, expectations for economic growth over the next 12 months decreased by 1% in July. Consumers' expectations for house price increases over the next year remained unchanged from May, while expectations for mortgage interest rates in the next 12 months held steady at 4.8%, according to the survey.