Posted By Global Banking and Finance Review
Posted on May 28, 2025
FRANKFURT (Reuters) -Euro zone consumers raised their inflation expectations in April but kept a steady view on price growth further out, highlighting elevated uncertainty amid a global trade war, the ECB's Consumer Expectations Survey showed on Wednesday.
Households see inflation at 3.1% over the next year, above the 2.9% predicted a month earlier and also well above the ECB's 2% own target.
That reading, however, goes counter to the ECB's own projections that price growth was set to slow given weak economic growth, muted wage increases, lower energy costs and a stronger euro.
This combination of muted price pressures along with pervasive uncertainty related to U.S. tariffs is why the ECB is all but certain to cut interest rates for the eight time in 13 months next week.
Inflation expectations three and five years out remained unchanged, the ECB said, based on a survey of 19,000 adults in 11 euro zone countries.
Consumers see price growth at 2.5% in three years and at 2.1% in five years.
(Reporting by Balazs KoranyiEditing by Bernadette Baum)