ECB survey shows increased inflation expectations

In October there were higher Eurozone’s consumer expectations for the coming year. However, the forecast for three years ahead remained unchanged. According to the ECB's monthly survey, the expected rate is still well above the European Central Bank's target of 2%.

Inflation has jumped this year due to exorbitant energy and food prices. Consequently, the ECB was forced to raise rates harshly in order to soften at least long-term expectations. 

Inflation reached a record high of 10.6% in October and then fell to 10% the next month. Despite this, the rate of deflation in early 2023 will be slow and further acceleration is not expected until the second half of the year.

Inflation expectations for the next 12 months rose from 5.1% in September to 5.4% in October. Economic growth forecasts for the next 12 months fell to -2.6%. In addition, the unemployment rate is rising, and income growth is expected to follow the inflation rate.