ECB’s Consumer Expectations Survey for November 2024 revealed that inflation expectations continued their upward drift, with the median forecast for inflation over the next 12 months ticking up to 2.6%, from 2.5% in October. This marks the second consecutive monthly increase. Longer-term inflation expectations for three years ahead also rose to 2.4%, up from October’s 2.1%, reaching a level last seen in July 2024.
Despite the uptick in inflation forecasts, uncertainty around short-term inflation expectations held steady at its lowest point since February 2022. This suggests consumers are becoming more confident in their projections, albeit with inflation still running above ECB’s 2% target over the medium term.
On the downside, economic growth expectations took a sharper negative turn, with households predicting a contraction of -1.3% over the next 12 months, compared to the -1.1% forecast in October. This worsening outlook reflects persistent concerns about the Eurozone’s economic health amid weak demand and geopolitical risks.
Labor market sentiment also deteriorated, as expectations for unemployment rate 12 months ahead climbed to 10.6%, reversing October’s slight improvement to 10.4%.
