FRANKFURT (Reuters) – Euro zone consumers raised their inflation expectations in March, even as the rate of price growth fell and the European Central Bank kept raising interest rates, an ECB survey showed on Thursday.
The median respondent in the latest Consumer Expectation Survey saw prices growing by 5.0% in the coming 12 months, up from 4.6% in the previous survey round in February.
It was the first increase in inflation expectations since the autumn, an unwelcome development for an ECB that is trying to stop the current high rate of price growth from becoming entrenched.
The ECB slowed the pace of its interest rate increases last week but signalled more tightening to come in what markets expect to be the final stage of its fight against inflation.
Longer-term expectations also increased sharply, with inflation three years ahead now seen at 2.9% after a 2.4% reading a month earlier.
The CES is a monthly online survey of around 14,000 adults from Belgium, Germany, Spain, France, Italy and the Netherlands. It is one of the inputs used by ECB policymakers in their deliberations.
(Reporting By Francesco Canepa; Editing by Balazs Koranyi)
