MNI BRIEF: EZ Consumer Inflation Expectations Edge Higher

Consumer inflation expectations across the eurozone for the next 12 months increased to 2.8% in August, accelerating from 2.6% in July, according to the latest ECB Consumer Expectations Survey, published Friday.

Expectations for three years ahead were unchanged at 2.5%, while the outlook inflation five years ahead increased to 2.2%, from 2.1% in Jul -- the highest value observed since August 2022. Uncertainty about inflation expectations over the next 12 months
increased slightly in August, the survey showed.

The median rate of perceived inflation over the previous 12 months was unchanged at 3.1% for the seventh consecutive month. For comparison, the actual annual inflation rate reported by Eurostat for August was just 2.0%.

The data will have little direct impact on ECB policymaking with the likely time horizon for the next big discussion on rates being December. However, at the margins, it does offer a further argument for the more hawkish committee members of the Governing Council (see MNI SOURCES: Doubts Over EU Carbon Pricing Key For ECB  Rates )