MNI BRIEF: Boost For ECB As Consumer Price Expectations Slow

Consumer expectations for eurozone inflation in coming months declined again in February, offering some comfort to European Central Bank policymakers concerned about the possibility of a wage-price spiral from elevated negotiated pay deals.

Median expectations for inflation over the next 12 months fell to 4.6%, down from 4.9% in January, while the consumer outlook for inflation three years ahead edged down from 2.5% to 2.4%, the ECB's latest survey showed. Inflation expectations remained well below the perceived past inflation rate, particularly at the horizon of three years. Uncertainty about inflation expectations 12 months ahead was unchanged, remaining broadly in line with elevated levels observed since March 2022.

Consumers saw nominal income growing by 1.2% over the next 12 months, down from 1.3% in January. The small decline reflects the lower expectations of consumers in households with median or below-median incomes. (See MNI EXCLUSIVE: ECB Should Hike As Market Fears Wane - Kazaks)