Inflation Expectations Dip Slightly

In its latest Consumer Expectations Survey for January 2025, the European Central Bank (ECB) revealed a slight decrease in inflation expectations for the upcoming year. The figures have adjusted from 2.8% in December 2024 to 2.6% in January 2025.

Stability in Long-Term Inflation Expectations

Despite the short-term fluctuations, the three-year ahead inflation expectations have remained steady at 2.4%. The ECB highlighted that both one-year and three-year inflation expectations continue to trail behind the perceived past inflation rate. Additionally, the uncertainty surrounding inflation expectations over the next 12 months has remained at its lowest since February 2022 for six consecutive months.

Economic Growth and Unemployment Outlook

On a brighter note, consumer expectations for economic growth over the next 12 months have seen a slight improvement, moving from negative 1.3% in December 2024 to negative 1.1% in January 2025. Similarly, the expectations for the unemployment rate one year ahead have also declined slightly, from 10.5% in December 2024 to 10.4% in January 2025.