European Central Bank's (ECB) Survey of Professional Forecasters has shown that the Euro zone inflation could accelerate faster than earlier thought, underpinning the bank's decision to slowly remove stimulus. The bank decided to stay on course to end asset purchases this year and hike rates by late 2019. It is satisfied that a five-year growth run will push price growth higher but also has concerns that a global trade war could unravel the expansion.
Headline inflation is pegged at 1.7 per cent this year, above a previous projection for 1.5 per cent, while next year's rate is also seen at 1.7 per cent, above the 1.6 per cent projected three months ago, according to the survey of 56 forecasters. The figures match the bank's own staff projections, which see inflation holding at 1.7 per cent through 2020, a rate that is close to the bank's target but still seen by ECB chief Mario Draghi as a miss. With regard to the growth, the survey sees a somewhat slower expansion in the near term than projected three months ago, but long-term expectations remained unchanged.
