Eurozone consumers see inflation staying high after Iran war-driven oil shock

FRANKFURT- Eurozone consumers expect inflation to remain elevated after the Iran conflict triggered a sharp rise in oil and energy prices, said a survey from the European Central Bank (ECB) released on Monday.

According to the ECB's latest consumer expectations survey, the median perceived inflation rate over the previous 12 months rose to 4.0 percent in April, up from 3.5 percent in March.

Consumers' expectations for inflation over the next 12 months remained unchanged at 4.0 percent, indicating that households still see price pressures as persistent.

The survey showed that uncertainty over inflation expectations for the coming year remained at a high level. Energy prices have risen sharply since the Iran conflict began in late February, with consumers feeling the impact most directly through higher fuel prices at petrol stations.

The survey also pointed to weaker household income and growth expectations. Consumers' nominal income growth expectations for the next 12 months fell to 0.8 percent in April from 1.2 percent in March. Economic growth expectations became slightly more negative, declining to minus 2.2 percent from minus 2.1 percent.

The oil price shock has pushed eurozone inflation to 3.0 percent in April, significantly above the ECB's target. As a result, financial markets expect the central bank to raise interest rates for the first time this year at its next policy meeting.

The ECB's consumer expectations survey is a monthly online survey of about 19,000 consumers across 11 eurozone countries.