Thread by @ecb

🧵 How much less will people consume in response to the recent increase in energy prices? After a period of recovery following the pandemic, the rise in commodity prices since last summer has affected people’s spending plans ecb.europa.eu/pub/economic-b…
#EconomicBulletin

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Exposure to fluctuating energy prices differs across income groups: the less people earn, the bigger the impact of higher prices. Poorer households spend a large percentage of their income on energy, meaning they are particularly affected by rising costs

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Targeted fiscal policies can play a key role in supporting those most affected. According to our Consumer Expectations Survey, people with higher exposure to changing energy prices are more likely to feel a need for governments to buffer the impact of increasing costs

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The sharp increase in energy prices has also significantly affected import prices and led to a deterioration in the euro area terms of trade.

Want to find out more? Read our #EconomicBulletin ecb.europa.eu/pub/economic-b…

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