Euro zone consumers take benign view on inflation surge, ECB survey shows

FRANKFURT, June 1 (Reuters) - Euro ‌zone consumers kept ​steady ​or lowered their inflation expectations in April, a hopeful sign for policymakers that crucial medium-term price bets are not signalling ‌any oversized shift away from the target, an ECB survey showed ⁠on Monday.

Inflation soared to 3% in April on higher oil prices, well above the ‌ECB's 2% target, and some ‌policymakers had expressed concern that household views are starting to move too far away from target, potentially signalling an unanchoring of policy-relevant expectations.

However, ​the April edition of the ECB's monthly consumer survey showed a more benign trend, as expectations one year ahead held steady at 4.0% ⁠while for three years out, they eased to 2.9% from 3.0%.

The survey, an important input into ​policy deliberations at the June 11 meeting, also showed expectations five years ahead unchanged at 2.4%.

"Respondents in lower-income quintiles continued ​to report on average slightly higher inflation ‌perceptions and expectations," the ECB said. "Younger respondents continued to report lower inflation perceptions and expectations than older respondents."

The survey ⁠is unlikely to move market expectations for the near term as policymakers have extensively telegraphed a 25-basis-point hike in the bank's 2% deposit rate in June.

But ⁠the data may temper bets for follow-up moves as they suggest no need for rapid ​policy tightening like in 2022, when prices ran away, eventually hitting double-digit territory.

This is partly because expectations for economic growth became more negative, the survey showed, with consumers ‌anticipating a 2.2% economic contraction in the year ahead and they also curbed their income growth bets to ‌0.8% from 1.2%.

Fresh euro zone inflation data is due on Tuesday and economists ⁠polled by Reuters see the ‌rate rising to 3.2%. ​Price growth could keep accelerating in the coming months and may peak closer to 4%.

(Reporting by Balazs Koranyi; Editing by ‌Alexandra Hudson)

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