European consumers have raised their inflation expectations for the eurozone in the coming years, amid ongoing uncertainty stemming from the trade war sparked by U.S. President Donald Trump.
A survey conducted by the European Central Bank, released on Tuesday, showed that the expected inflation rate for the next twelve months rose to 2.9%, up from 2.6% in the previous month’s survey.
In commentary on the survey, the ECB stated that the poll, which covered 19,000 consumers across 11 eurozone countries, indicated inflation expectations for the next three years would increase to 2.5%, compared to 2.4% in the prior survey.
The bank added that these changes in inflation expectations are unlikely to be temporary, as the world is undergoing a fundamental shift in how countries interact economically, financially, and diplomatically due to the ongoing trade war.
According to the survey results, European consumers expect the economy to contract by 1.2% over the next twelve months, with unemployment expectations dropping to 10.4%, and housing prices projected to rise by 3.1%.
