An ECB quarterly survey published Friday showed euro-area inflation expectations
for this year and next were revised up and that inflation may not return to the
ECB’s 2% target until 2028. The survey raised the average inflation forecast for
2023 to 3.0% from 2.7% and lifted the 2024 forecast to 2.6% from 2.2%. Core
inflation forecasts changed little, indicating the upward revision is driven
mainly by energy costs, which the ECB says currently sit between its adverse and
severe scenarios. Although policymakers left rates unchanged on Thursday, the
stronger inflation profile could prompt another ECB rate increase in December.