Euro zone inflation expectations rise slightly, ECB poll shows

Key facts

• Euro zone consumers' inflation expectations for the next 12 months rose to 3.0% in August.
• Expectations for inflation three years ahead increased to 2.9%.
• Expectations for inflation five years ahead rose to 2.5%.
• The euro zone's current account surplus narrowed to €27.6 billion in July.
• The current account surplus in June was €35.1 billion.

Euro zone consumers slightly increased their inflation expectations last month, with the median respondent anticipating prices to grow by 3.0% over the next 12 months, up from 2.9% in July, according to a European Central Bank survey. Expectations for inflation three years ahead rose to 2.9% from 2.7%, and the five-year forecast increased to 2.5% from 2.4%. This comes as the ECB recently raised borrowing costs for the second time this year and policymakers anticipate further tightening. Separately, the euro zone's current account surplus narrowed to €27.6 billion in July from €35.1 billion in June. The surplus represented 1.7% of the euro area's GDP for the 12 months ending in July, down from 1.9% a year earlier. The narrowing was primarily attributed to developments in services trade and income flows, rather than goods trade.