(Bloomberg) -- Inflation expectations of consumers in the euro zone inched down in March, according to the European Central Bank — supporting plans to kick off monetary easing in the coming weeks.

Prices are seen advancing 3% over the next 12 months, down from 3.1% in February, the ECB said Friday in its monthly poll. That’s the lowest level since December 2021, it said. 

For three years ahead, they’re expected to rise by 2.5% — the same as last month.

The results are likely to reinforce the resolve to begin lowering the deposit rate from its record high of 4% in June, with confidence building among officials that inflation is returning to the 2% target. 

Bank of Italy Governor Fabio Panetta even warned on Thursday against “unnecessary delays” that could mean a return to ultra-low rates if the economy continues to stagnate and inflation expectations fall below the goal. 

It’s the path beyond the initial cut where opinions differ, as some policymakers push for multiple reductions this year but others caution about upside risks to prices from the Middle East and the knock-on effect of prolonged policy divergence with the US should the Federal Reserve cut borrowing costs more slowly.

Inflation data for April are due next week. Bloomberg Economics predicts price growth to have remained steady at 2.4%, while a nowcast model sees a slight deceleration to 2.3%. 

The ECB’s poll showed continued pessimism among consumers on the economy, where they foresee a 1.1% contraction over the next 12 months, the same as in February.

The survey also showed:

• Expectations for the unemployment rate 12 months ahead dipped to 10.7% from 10.9%
• Nominal incomes are seen growing by 1.3% compared with 1.4%
• Consumers expect the price of their home to rise by 2.4%, unchanged
• Expectations for mortgage interest rates fell to 5% from 5.1%

--With assistance from Barbara Sladkowska.

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