BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - Euro area consumers' inflation expectations for the one year ahead and those for the three-year horizon surged in March as crude oil price continue to rise due to the ongoing conflict in the Middle East, results of a monthly survey by the European Central Bank showed on Tuesday.
Median expectations for inflation for the next 12 months and those for the three years ahead climbed to 4.0 percent and 3.0 percent, respectively, from 2.5 percent in February, the ECB Consumer Expectations Survey showed. Medium term price growth expectations are well above the ECB's inflation target of 2.0 percent.
Inflation expectations for the 5-year horizon also rose, to 2.4 percent from 2.3 percent, the survey revealed. Uncertainty surrounding these expectations also increased in March.
The survey was carried out between March 5 and 30. The online survey is conducted among nearly 19,000 consumers aged 18 and above, from 11 euro area countries. Official data showed Eurozone inflation surged to 2.6 percent in March from 1.9 percent in February, marking the highest rate since July 2024. Energy prices jumped 5.1 percent after a 3.1 percent drop in the previous month.
The ECB Governing Council, led by President Christine Lagarde, is set to announced the latest policy decision on Thursday. The central bank is widely expected to leave interest rates unchanged, but signal that policymakers are open to interest rates hikes ahead if needed as inflationary pressures become entrenched.
Consumers' income growth expectations over the next 12 months were unchanged at 1.2 percent in March, while their expected nominal spending growth for the same time period rose to 4.1 percent from 3.5 percent. The latest level is the highest since May 2023.
Eurozone consumers' economic growth expectations for the one-year ahead turned more negative in March, down to -2.1 percent from -0.9 percent in February, the ECB survey showed.
Further, the expectations for the unemployment rate in the same time period climbed to 11.3 percent from 10.8 percent. The future jobless rate continues to slightly higher than the perceived unemployment rate of 10.6 percent, suggesting a broadly stable labor market outlook, the ECB said.
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