FRANKFURT, Feb 3 (Reuters) – Euro zone companies expect to slow the pace of price increases this year as their outlook for costs and demand becomes less clear, a survey by the European Central Bank (ECB) showed.
The central bankraised interest rates for the fifth straight times on Thursday and signalled more hikes ahead, reaffirming it would stay the course in the fight against high inflation.
Helping the ECB’s effort to tame rising prices, its quarterly exchange with large euro zone companies showed they had been slowing the pace of price increases and were anticipating smaller rises this year.
“Selling prices continued to increase in aggregate but at a moderating pace and with more variability across sectors and a less certain outlook,” the ECB said in its summary of the findings.
Expectations of entrepreneurs for future price increases peaked in early 2022 and have since been steadily declining, with a smaller pace of price hikes seen in 2023.
“The effective likelihood that they would increase prices would…depend on the ‒ increasingly uncertain ‒ evolution of input costs and (price sensitivity of) demand,” the ECB said.