EU consumer inflation expectations 12 months ahead rise a bit in Sept

Expectations for nominal income growth over the next 12 months declined markedly, while expectations for nominal spending growth remained unchanged.

Perceived inflation over the previous 12 months continued to rise, with the median rate now standing at 8.1 per cent.

Inflation expectations remained well below the perceived past inflation rate, particularly at the medium-term horizon of three years. Median expectations for inflation over the next 12 months increased from 5 per cent to 5.1 per cent, while expectations for inflation three years ahead were unchanged at 3 per cent.

Younger respondents (18-34 years) continued to report lower inflation perceptions and expectations than older respondents (55-70 years), an ECB press release said.

Consumers in September expected their nominal income to grow by 0.6 per cent over the next 12 months, down from 1 per cent in August. The decline was strongest for older respondents (55-70 years) and households with income around or just below the median.

Economic growth expectations for the next 12 months declined significantly from minus 1.7 per cent in August to minus 2.4 per cent. Consistent with the lower expectations for economic growth, expectations for the unemployment rate 12 months ahead rose to 12.2 per cent, from 11.9 per cent in August.

ALCHEMPro News Desk (DS)