FRANKFURT (Reuters) – The European Central Bank’s new strategy to raise inflation in the euro zone has failed to convince financial analysts in the bloc’s biggest economy, Germany, a poll showed on Thursday.
The ZEW survey, seen by Reuters ahead of its publication on Friday, highlights the uphill battle faced by the ECB to win over investors, particularly in Germany, one of the euro zone’s countries where scepticism against the central bank’s easy money policy runs deepest.
The ECB announced its new strategy in early July, pledging to be “foreceful” and “persistent” in stimulating price growth and even let it overshoot its 2% target for some time because interest rates are near rock bottom and can hardly be cut farther.
It hopes that the new approach will convince investors that it is serious about achieving its goal – which it has lagged for most of the past decade – and push up their inflation expectations.
Yet the ZEW survey showed that a slight majority of 147 analysts at German banks, insurance companies and large industrial groups was unconvinced.
Around 46% of participants said the ECB’s new strategy had no impact on their inflation expectations and 5% even cut their forecasts after the announcement.
Conversely, 49% of respondents said the ECB’s new strategy had a “positive” or “very positive” effect on their projections.
Around 70 poll respondents agreed to put a number on that change, showing they had raised their inflation forecasts by 40 basis points on average for the 2021-23 period.
A Reuters consensus of analysts sees inflation at 1.9% this year, 1.4% the next and 1.5% in 2023.
(Reporting By Francesco Canepa and Frank Siebelt; Editing by Chizu Nomiyama)
