Eurozone Inflation Expectations Remain Unchanged

Eurozone consumers' inflation expectations remained stable in July, the latest consumer expectations survey published by the European Central Bank showed on Friday.

Inflation expectations for the coming year was steady at 2.8 percent after having fallen in May to their lowest level since September 2021.

Inflation expectations for the next three years also remained unchanged in July, at 2.3 percent.

However, economic expectations became more negative. The median forecast for economic growth over the next 12 months dropped to -0.9 percent from -0.8 percent in May.

Meanwhile, expectations for the unemployment rate over the coming twelve months decreased to 10.6 percent from 10.7 percent in May, the lowest level since the start of the series.

Further, consumers expect prices of their homes to increase over the next twelve months in June. House prices were expected to rise 2.7 percent compared to 2.6 percent in May, while expectations for mortgage interest rates edged down to 4.8 percent from 4.9 percent.

Earlier this month, the European Central Bank left its benchmark interest rates unchanged ahead of a possible rate reduction in September even as they worry about the sticky inflation.

In June, the ECB cut interest rates for the first time since 2019, citing an improvement in the inflation outlook.