SAFE survey: firms expect 3.5%

The story here is not that euro-area inflation is suddenly back to square one. It’s narrower than that — and maybe more important. Firms in the ECB’s latest SAFE survey said they now expect to raise their own selling prices by 3.5% over the next 12 months, up from 2.9% in the previous round. That is a big move for one quarter, and it landed just as policymakers were trying to judge whether the latest Middle East shock would stay in energy markets or spread through the wider economy. (ecb.europa.eu) ### What is SAFE, exactly? SAFE is the ECB’s Survey on the Access to Finance of Enterprises. Despite the name, it is not just about loans. It also asks thousands of euro-area companies about sales, costs, wages, investment and what they expect to do next. In the first-quarter 2026 round, responses (ecb.europa.eu) latest escalation in the Middle East. (ecb.europa.eu) ### What changed in this round? The cleanest change was in firms’ own price plans. Expected selling-price growth over the next year rose to 3.5% from 2.9%. Expected non-labour input-cost growth — basically energy, materials, transport and other non-wage costs — jumped even more sharply, to 5.8% from 3.6%. Short-term inflation expectations also rose markedly. (ecb.europa.eu) ### Why did firms suddenly get more nervous? The ECB itself tied the shift to the war in the Middle East. More specifically, the survey says daily responses collected before and after February 28 show the conflict significantly lifted firms’ selling-price and input-cost expectations. Basically, com(ecb.europa.eu)ore pass-through to customers. (money.usnews.com) ### Is this a wage-price spiral? Not yet — and that is the key nuance. Wage expectations actually eased a bit, to 2.8% from 3.1%. So firms are talking about charging more, but they are not simultaneously saying workers will force a second round of pay increases. That makes this look more like a classic imported cost shock than a self-sustaining domestic inflation loop. (money.usnews.com) ### Why does the ECB care so much? Because central banks can usually look through one-off energy spikes if they fade quickly. The problem starts when firms and workers begin to behave as if higher inflation is normal again. This survey is uncomfortab(money.usnews.com)ns stayed steadier and wage pressures did not re-accelerate. (msn.com) ### Is there anything else in the survey worth noticing? Yes — financing conditions tightened too. A net 26% of firms reported higher interest rates on bank loans, up from 12% in the previous quarter, and firms expected external financing availability to edge down. So (msn.com)great for growth. (ecb.europa.eu) ### So what should you take from this? Think of it as a warning flare, not a verdict. Euro-area firms are signaling that the latest energy shock is likely to push prices higher over the next year, and the jump from 2.9% to 3.5% is too large for the ECB to shrug off. But the absence of a wage breako(ecb.europa.eu)s become entrenched again. (ecb.europa.eu)