Euro zone inflation forecasts steady, growth outlook unchanged

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Euro zone inflation forecasts steady, growth outlook unchanged

Inflation in the Euro zone rose in October but predictions for three years out held steady at a rate well above the European Central Bank's 2% target, according to a monthly survey on Wednesday by the European Central Bank.

Inflation soared this year on sky high energy and food prices, and the ECB has been raising rates at a record pace to temper at least longer-term expectations.

Inflation expectations for the next 12 months went up to 5.4% in October from 5.1% in September, while expectations for inflation three years ahead were unchanged at 3.0%, according to a survey of about 14,000 people in six of the euro zone's biggest countries.

In October, inflation hit a record high 10.6% and dropped to 10% last month, but its decline is expected to be slow in the second half of 2023 before disinflation accelerates in the second half of the year.

The ECB said that the inflation outlook increased as consumers became more pessimistic about growth and employment.

The economic growth expectations for the next 12 months fell to 2.6% from 2.4% in September, while unemployment is rising and income growth is expected to trail inflation.