Eurozone inflation expectations rise sharply
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Golden Ten Data reported on April 28 that a key survey by the European Central Bank showed that eurozone consumers sharply raised their inflation expectations in March, which has made policymakers uneasy. Since the war in Iran drove up energy prices, inflation has risen significantly, and the European Central Bank is now closely monitoring whether this shock will cause second-round effects that would require tightening policy. The ECB's monthly Consumer Expectations Survey, released on Tuesday, showed that inflation expectations for the next year jumped from 2.5% a month ago to 4.0%, and expectations for the next three years rose from 2.5% to 3.0%, both significantly higher than the bank's 2% medium-term target. However, five-year inflation expectations only edged up slightly from 2.3% to 2.4%. The survey also showed that consumers are becoming increasingly pessimistic about overall economic growth, expecting the economy to shrink by 2.1% in the coming year, compared to a previous estimate of just a 0.9% decline the month before. Income expectations for the coming year remained unchanged, but expected spending growth rose from 4.6% to 5.1%.
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