UPDATE 1-Euro zone inflation expectations unchanged despite growth slowdown: ECB survey
(Adds detail)
FRANKFURT, Oct 26 (Reuters) - Euro zone prices are expectedto continue growing at 1.7 percent per year until 2020 despiteweaker underlying inflation and economic growth, a EuropeanCentral Bank survey showed on Friday.
The ECB confirmed a day earlier plans to wind down its 2.6trillion euro ($2.96 trillion) stimulus programme at the end ofthis year and raise interest rates sometime after next summerbecause it still sees inflation holding up despite uncertaintiesaround growth.
Its latest Survey of Professional Forecasters on Fridaybacked up that line of thought, with unchanged expectations forheadline inflation for this year and the next two, at 1.7percent, and in the longer term at 1.9 percent.
But the forecasters polled by the ECB cut their estimatesfor core inflation, which strips out the more volatile energyand food prices, and economic growth for this year and the next.
"Respondents typically attributed their revisions toexternal factors such as higher energy prices weighing ondisposable income, with many also noting ... some dampeningimpact on exports and investment due to increased uncertaintysurrounding the outlook for world trade," the ECB said.
The euro zone's central bank targets a headline inflationrate "below, but close to 2 percent" over the medium term.
In its survey, the ECB also noted that growth in core priceswas still accelerating, albeit now 10 basis points more slowlyat 1.2 percent this year and 1.5 percent the next.
"The expected pick-up in underlying inflation remainedunderpinned by a pick-up in annual growth in compensation peremployee, which was expected to increase to 2.3 percent by2020," the central bank said.
($1 = 0.8792 euros)
(Reporting By Francesco Canepa; Editing by Robin Pomeroy)
004906975651247; Reuters Messaging:francesco.canepa.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |