Long-term inflation expectations of consumers: an overview

Pedro Baptista, Colm Bates, Omiros Kouvavas, Justus Meyer and Katia Werkmeister

Economic Bulletin Boxes, 2025, vol. 3

Abstract: This box explores the newly available five-year-ahead inflation expectations collected in the ECB Consumer Expectations Survey (CES). While consumers’ beliefs about longer-term inflation expectations are characterised by substantial heterogeneity and dispersion, the median five-year-ahead expectations have been close to the ECB's 2% inflation target since September 2024. This relative stability contrasts with more variable one-year and three-year expectations, which have been more sensitive to actual changes in inflation. More recent CES data also suggest an increasing concentration of five-year expectations consistent with the ECB’s target, indicating stronger consumer confidence in the ECB’s ability to maintain price stability, as realised inflation has returned to values closer to 2%. Taken together, our analysis supports the value of longer-term expectations for evaluating the anchoring of consumer inflation expectations. JEL Classification: D84

Keywords: Central Bank Credibility; Inflation Expectations (search for similar items in EconPapers)
Date: 2025-04
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2025:0003:5

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