The inaugural quarterly M&G YouGov Inflation Expectations Survey asked more than 8,000 individuals from Europe and Asia to predict inflation rates in one and five years’ time.
In Europe, Italians and Spaniards had the greatest near-term fears, with participants in both countries forecasting an average of 3% inflation for the shorter time-frame. However, respondents from all of the surveyed eurozone nations expected the same 3% rate in five years’ time (see table below).
While 3% represented a fall in longer-term inflation expectations compared with data gathered in February – a fall attributed by M&G to lower commodity prices – such a rate would be well above recent eurozone inflation levels, as well as the European Central Bank’s medium-term target of 2%.
Indeed, rising prices were a concern for at least three-quarters of respondents in France, Italy and Spain, and almost half of participants in these countries expected their net incomes to fall over the next year.
Nervousness over longer-term inflation tallies with polling conducted in Q2 by Expert Investor Europe. Delegates at our Frankfurt, Madrid, Paris and Stockholm conferences mostly worried about deflation over the next 12 months. However, inflation was the bigger fear over longer time-frames.
Platinum members can view full voting breakdowns for the Expert Investor Deutschland, Spain, France and Nordic events. To see how sentiment on various topics has changed over time, use the Country Data Summaries links on the right-hand side of The Data Centre.
M&G YouGov Inflation Expectations Survey