Median consumer inflation perceptions in the European Union (EU) over the previous 12 months decreased further in March this year for the sixth consecutive month to 5 per cent from 5.5 per cent in February, according to the European Central Bank (ECB) Consumer Expectations Survey conducted in March.

Median expectations for inflation over the next 12 months also edged down to 3 per cent in March from 3.1 per cent in February. They are now at their lowest level since December 2021.

Inflation expectations three years ahead remained unchanged in March at 2.5 per cent for the fourth month in a row, an ECB release said.

Inflation expectations at the one-year and three-year horizons remained well below the perceived past inflation rate.

Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (those aged 35-54 and those aged 55-70).

Expectations for nominal income growth and nominal spending growth over the next 12 months decreased slightly in March to 1.3 per cent (from 1.4 per cent in February) and 3.6 per cent (from 3.7 per cent in February) respectively, while expectations for economic growth over the next 12 months remained unchanged. The expected unemployment rate in 12 months’ time decreased.

Perceptions of nominal spending growth over the previous 12 months remained stable at 6.4 per cent.

Economic growth expectations for the next 12 months remained unchanged at minus 1.1 per cent. By contrast, expectations for the unemployment rate 12 months ahead decreased to 10.7 per cent from 10.9 per cent in February.

Consumers continued to expect the future unemployment rate to be only slightly higher than the perceived current unemployment rate (10.4 per cent), implying a broadly stable labour market.

Fibre2Fashion News Desk (DS)

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