Euro zone consumers cut inflation expectations to lowest level in 3 years, by Reuters

FRANKFURT (Reuters) – Eurozone consumers cut their inflation expectations for the next 12 months to the lowest level in three years, a European Central Bank survey showed on Friday, a further sign that the ECB is close to winning the battle to control. prices.

The consumer expectations survey is an indicator of whether households have confidence in the ECB’s ability to reduce inflation to its 2% target, which in turn can influence their behavior when spending, saving or demanding pay rises.

In the August edition of the survey, the median respondent saw prices rising 2.7% over the next 12 months, the slowest pace since September 2021 and down from 2.8% in July.

Consumers cut their inflation expectations for the next three years – from 2.4% to 2.3%, the lowest level since June.

The ECB cut borrowing costs earlier this month, adding to a first reduction since June, amid weaker growth forecasts and expectations of a continued, if bumpy, decline in inflation next year.

And euro zone central bank policy doves are preparing to fight for further tapering in October after a string of weaker-than-expected economic data, a move that could face resistance from their more hawkish peers, sources told Reuters.