Consumers in the euro area expect inflation of 3.1% over the next year and a weaker economy

The ECB’s September survey shows that incomes are expected to grow more slowly than spending, while economic prospects have worsened. However, inflation expectations three and five years ahead remained stable.

Euro area consumers slightly revised up their inflation expectations for the next 12 months, from 3% to 3.1%, and have become more pessimistic about the economy’s outlook. The results of the September survey, published by the European Central Bank on October 23, 2026, also show that respondents expect spending to increase faster than incomes.

In brief
Consumers surveyed by the ECB expect inflation of 3.1% over the next 12 months, up from 3% in August. Expectations three and five years ahead remained at 2.9% and 2.5%, respectively.

Over the next year, expected nominal income growth is 1.1%, while spending is expected to grow by 3.7%. Households therefore expect to spend more, at a faster pace than their incomes will grow.

Expectations for economic growth fell from −1.2% to −1.5%. These are consumers’ assessments, not an ECB forecast.

Expected unemployment one year ahead rose to 11.3%. However, the difference from the current perceived level of 10.6% is described by the ECB as consistent with broadly stable labour-market prospects. Low-income households expect both higher inflation and higher unemployment than high-income households.

Respondents expect their homes to become 3.5% more expensive and mortgage interest rates to reach 4.9%. At the same time, the balance of responses indicating more difficult access to credit increased.

The monthly survey covers approximately 19,000 adults in 11 euro area countries, excluding Romania. The October results are scheduled for November 27.

The median inflation expectation for the next year increased by 0.1 percentage points from August. Perceived inflation over the past 12 months also rose by 0.1 percentage points, from 3.5% to 3.6%. The median is the middle value in the distribution of responses. The indicators describe how consumers view prices and do not represent the inflation rate actually measured.

The change did not extend to longer horizons. Median inflation expectations three years ahead remained at 2.9%, while those five years ahead stayed at 2.5%. Respondents from the lowest-income households continued, on average, to perceive and expect higher inflation than those from the highest-income households.

For household budgets, the survey sets two different developments side by side. Expected nominal income growth over the next 12 months reached 1.1%, up from 1% in August, while anticipated spending growth rose from 3.6% to 3.7%. The figures are expressed in nominal terms, without adjustment for inflation. The difference between the growth rates cannot be read as a direct measure of lost purchasing power, because spending depends both on prices and on what households buy.

Looking back, respondents estimated that their own nominal spending had increased by 5.3% over the past 12 months, compared with 5.2% in the August survey. This assessment concerns total household spending, not merely the rising cost of products and services.

Pessimism is more pronounced in assessments of the economy. For the next 12 months, the average expectation for economic growth fell from −1.2% to −1.5%. Respondents therefore anticipate a larger contraction than in the previous month. The result reflects consumers’ views, not the ECB’s economic forecast or an economic decline already recorded.

Expected unemployment one year ahead increased from 11% to 11.3%. The comparison with August shows a deterioration in expectations, but the ECB also points to the relatively small gap from the current rate perceived by respondents, 10.6%. On this basis, the institution describes labour-market prospects as broadly stable. Both figures come from consumers’ responses, not from statistics measuring actual unemployment.

Differences between income groups remain large. Respondents in the lowest-income fifth of households expect unemployment of 13.6% one year ahead, compared with 9.7% in the highest-income fifth. These are the two groups’ estimates of the unemployment rate, not unemployment rates recorded within those groups.

In the housing market, consumers expect the price of their own home to rise by 3.5% over the next 12 months, compared with 3.4% in August. Expected mortgage interest rates one year ahead remained at 4.9%. Income also divides respondents’ expectations here. Those in the lowest-income fifth expect rates of 5.7%, while the highest-income group anticipates 4.4%.

Access to credit is also viewed as more difficult. Compared with August, the difference increased between the share of respondents reporting tighter conditions over the past 12 months and the share observing an easing. The same balance also increased for expectations over the next 12 months.

The ECB survey is conducted online each month among approximately 19,000 adults in Belgium, Germany, Ireland, Greece, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland. Romania is not included. Responses for this round were collected between August 27 and September 28, 2026, and the results are used in economic policy analysis alongside other data sources.

Inflation figures are presented as medians. For income, spending, economic growth, unemployment, house prices and interest rates, the ECB uses weighted averages, with extreme response values adjusted.

The next round will show whether the deterioration in short-term expectations continues. The ECB is scheduled to publish the October results on November 27, 2026.

https://2eu.brussels/ro/news/gospodariile-din-zona-euro-se-asteapta-la-inflatie-si-somaj-mai-mari-in-timp-ce-perspectivele-economice-se-inrautatesc