Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Answer:
The MRO rate will peak above 3.5%.
Confidence level:
Not confident
Question 1: How likely is it that peak headline euro area inflation is behind us?
Answer:
Very likely
Confidence level:
Very confident
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Answer:
ECB policy interest rates will be too high in 2023.
Confidence level:
Confident
Comment:
Since the end of 2019, the US has grown by around 5%, while growth in Germany and France is only just over zero and 1% respectively. This suggests that Germany and France are operating below capacity, so strong rate increases make little sense. The ECB is overreacting.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
Prospects for Euro Area Inflation in 2023
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Question 1: How likely is it that peak headline euro area inflation is behind us?
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Euro weakness in 2022
Question 2: Should the ECB respond to movements in the euro-dollar exchange rate of the nature observed in 2022?
Question 1: What was the main cause for the euro’s decline relative to the US dollar in 2022?
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