Eurozone consumers face 2024 with a little more optimism than last year, at least as far as inflation is concerned. After the European Central Bank (ECB) placed rates at their highest since 2001, up to 4.1%, the perception is that inflation will reach 3.2% in the next twelve months. Although the figure is slightly higher than the 2.9% at which December closed and exceeds the central bank’s own expectations for this year (2.7%), they represent placing the price advance at 2022 levels, both in one year and three years. years, below the rates perceived in the past.
According to the consumer survey for December carried out by the Frankfurt-based organization through interviews with some 14,000 citizens of Belgium, Germany, Spain, France, Italy and the Netherlands, the uncertainty about inflation expectations for the pr Next year they have also decreased slightly. In this context, one of the items that they expect to rise in price is housing, which they predict will cost 1.2% more next year, while access to credit would become cheaper after reaching highs in October.
In this sense, expectations for twelve-month mortgage interest rates have fallen slightly to 5.3%, one tenth less than that recorded in October, with households with lower incomes being those who expected higher mortgage rates . . The forecast is in line with the general market sentiment regarding money reference rates, for which reductions are projected in 2024.
While waiting for the minutes of the European Central Bank (ECB), which will be known this Thursday, analysis houses such as JP Morgan are optimistic and even assure that this process can start in the third quarter with two or three cuts of up to 25 basis points each. However, until the Federal Reserve makes its move, they do not expect Christine Lagarde to take a step forward in this regard, despite the fact that the US central bank does not consider this possibility until the end of the year, for now.
The latest Bank of America survey of managers shows almost unanimity in this regard, since 91% expect rate cuts by 2024, although the probability of entering into recession in Europe continues to weigh. In this sense, European consumers contemplate pessimistic economic prospects with a fall of 1.2%, but they are somewhat better compared to the -1.3% that they project in contrast to the stable labor market that, for the moment, remains minimal. 6.4% in the single currency region.
