MNI BRIEF:Tariffs Push Inflation Expectations Up -ECB Bulletin

Tariffs were considered inflationary by around 40% of respondents in the ECB’s June Consumer Expectation Survey in June, raising that month's inflation expectations by 0.2 percentage points one year ahead, 0.13pp three years ahead and 0.06pp in the five years ahead horizon, the central bank's latest economic bulletin published on Monday.

A quarter of European consumers surveyed believed that trade tensions will slow economic growth, cutting their expectations for growth over the next 12 months by 0.4 percentage points. The respondents not highlighting effects on growth reduced their expectations by 2 tenths wjhen compared to the January survey.

Recent trade tensions are also altering consumer habits in Europe, with 26% of respondents saying they are switching away from U.S. products and 16% saying they have reduced overall spending: high-income households are more likely to switch away from US goods, while lower-income households are more inclined to cut back their overall spending, the bulletin says.