ECB: Expectations for wage and price growth in the eurozone are slowing down

According to the latest survey data from the European Central Bank (ECB), companies in the eurozone expect a slowdown in the growth rates of sales prices and wages over the next 12 months. This data comes at a time when the central bank is attempting to control inflation, which remains above the 2% target margin.

The survey, which involved over 5,000 enterprises, shows that expectations for sales price growth have been revised downwards – from 3.5% to 3.2% for next year. At the same time, forecasts for wage increases are also decreasing from 2.8% to 2.5% compared to the previous quarter.

Nevertheless, long-term inflation expectations remain stable. Inflation forecasts for one and three years remain at the 3% level, while for the five-year horizon, a slight increase to 3.1% is recorded.

Experts are monitoring the situation closely, as rising energy costs and geopolitical tensions (including conflicts in the Middle East) create a risk of so-called "second-round effects." This is the process where high product prices lead to demands for higher wages, which in turn pushes prices up again, creating an inflationary spiral.

The survey results will be a key factor for the ECB Governing Council when making decisions on interest rates at the upcoming meeting. Although markets expect rates to remain unchanged this week, high oil prices are fueling speculation about a potential increase in the deposit rate as early as September.