MNI BRIEF: EZ Consumer Inflation Expectations Slow In June-ECB

Eurozone consumer inflation expectations for the coming year fell by 0.2 percentage points to 2.6% in June, meaning that the increases observed in March and April have been fully reversed, the ECB's latest Consumer Expectations Survey showed.

The outlook for three years ahead was unchanged at 2.4%, while expectations for inflation five years ahead held steady at 2.1% for the seventh consecutive month. The median rate of perceived inflation over the previous 12 months remained unchanged at 3.1% for the fifth consecutive month, its lowest level since September 2021; for context, that compared to an actual headline rate of 2.0%, according to the latest data published by Eurostat.

The ECB still sees inflation hitting its 2% target over the medium term, although the projections published in June pointed to the headline rate hitting as low as 1.4% in the first half of 2026 before recovering (see MNI SOURCES: Markets Overplaying ECB's Hawkish Shift )