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- October 17, 202612°
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- INTEREST37.00%-1.00
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- October 17, 202612°
ECB survey shows inflation expectations rising across the euro area
In the European Central Bank’s August survey of approximately 19,000 adults, euro area consumers’ median inflation expectation for the next 12 months rose to 3%. Expectations for three and five years ahead increased to 2.9% and 2.5%, respectively, while perceived inflation over the past 12 months stood at 3.5%.
The European Central Bank’s (ECB) August survey showed that euro area consumers’ short- and long-term inflation expectations had increased. The median expectation for the next 12 months rose to 3% from 2.9% in July.
Three- and five-year expectations increase
Participants’ inflation expectation for three years ahead rose to 2.9% from 2.7%. The expectation for five years ahead also increased to 2.5% from 2.4%.
Consumers’ median perception of inflation over the past 12 months remained unchanged at 3.5%. Although uncertainty surrounding inflation expectations for the coming year declined, it remained above the level recorded before the conflicts in the Middle East began.
Differences emerge across income and age groups
Consumers in the lowest-income group continued to report higher perceptions and expectations of inflation than those in the highest-income group. Expectations among participants aged 18 to 34 remained below those of older consumers.
Income and spending expectations
Consumers’ expectation for nominal income growth over the next 12 months remained unchanged at 1%. Their expectation for spending growth over the same period also remained at 3.6%.
By contrast, their assessment of spending growth over the previous 12 months rose to 5.2% from 5.1%.
Growth and unemployment forecasts
Euro area consumers continued to expect economic growth of minus 1.2% over the next 12 months. The expected unemployment rate fell to 11% from 11.2%.
Housing and credit expectations
Survey participants expected housing prices to rise by 3.4% over the next year. Expectations for mortgage interest rates remained unchanged at 4.9%.
The ECB conducted the survey from August 6 to 24 with the participation of approximately 19,000 adults in 11 euro area countries.
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