MNI BRIEF: Trust, Income Role In Inflation Expectations - Buba

Lower-income German households relying on personal experience over data are more likely to increase their inflation expectations as a result of energy price rises than high-earners, well-informed observers and firms, a study published by the Bundesbank found.

Prior to energy costs increases, most groups expressed similar inflation expectations, the study showed.

“Households that are less informed about past inflation or have little trust in the ECB also tend to rely more on their personal experience of prices. By contrast, households’ level of education and their liquid wealth play no major role in the formation of expectations," the study said