# ECB survey shows rising inflation expectations despite energy price falls
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-07
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Euro Zone Consumer Inflation Expectations Edge Up in
Meta Description: Euro zone consumer expectations for inflation rose in December, despite recent interest rate hikes and falling energy prices. Learn more here.
URL: https://financedigest.com/ecb-survey-shows-rising-inflation-expectations-despite-energy-price-fallshtml

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FRANKFURT (Reuters) – Euro zone consumer expectations for inflation edged up again in December, a European Central Bank survey showed on Tuesday, indicating that recent interest rate hikes and falling energy prices have not yet tempered price growth fears.

Inflation peaked at over 10% in October but has been in rapid decline since on lower gas prices, even if underlying price growth is still inching up.

Median inflation expectations over the next three years rose to 3% in December from 2.9% a month earlier, the ECB said based on a survey of about 14,000 adults in six of the euro zone’s biggest countries. But median expectations over the [next 12 months](https://www.financedigest.com/prince-harry-and-meghan-to-visit-britain-next-month.html "Prince Harry and Meghan to visit Britain next month") held steady at 5%.

The ECB has [raised rates by 3 percentage points](https://www.financedigest.com/how-to-raise-my-credit-score-40-points-fast.html "How to raise my credit score 40 points fast") since July and promised another 50 basis point move in March, looking to restrict the economy enough to tame inflation expectations.

The problem is that when expectations stay high, workers and businesses adjust their wage-setting behaviour, entrapping rapid [price growth and making it harder for the ECB](https://www.financedigest.com/explainer-oil-price-surge-changes-ecb-narrative-only-at-the-margins.html "Explainer-Oil price surge changes ECB narrative only at the margins") to get back to its 2% target.

The [survey also showed a moderate improvement in growth](https://www.financedigest.com/uk-recruiters-slow-pace-of-pay-growth-in-march-rec-survey-shows.html "UK recruiters slow pace of pay growth in March, REC survey shows") and wage expectations and slightly reduced expectation for unemployment.

(Reporting by Balazs Koranyi; Editing by Christina Fincher)


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