ECB consumer inflation expectations climb even as past prices hold steady

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Consumers across the euro area are bracing for slightly higher prices in the months and years ahead, even as their perception of past inflation held steady, according to the latest ECB inflation expectations survey. The European Central Bank’s Consumer Expectations Survey for August 2026, published on 18 September 2026, shows households nudging up their inflation outlook while keeping most other economic expectations broadly frozen in place.

Key takeaways

Median perceived inflation over the past 12 months held at 3.5%, unchanged from July.
Expectations for inflation over the next 12 months rose to 3.0%, up from 2.9% in July, with three-year and five-year expectations also ticking higher.
Nominal income growth expectations stayed flat at 1.0%, and spending growth expectations held at 3.6%.
Economic growth expectations remained negative at -1.2%, while the expected unemployment rate 12 months ahead eased to 11.0% from 11.2%.
Home price growth expectations stayed at 3.4% and mortgage rate expectations held at 4.9%, while households reported less tightening of credit access than in July.

Inflation Perceptions and Expectations Rise in August

Euro area households still see inflation running at the same pace it did a year ago, but they now expect it to climb further out on the horizon. That’s the central signal from this month’s ecb inflation expectations survey, and it matters because it shows a gap opening up between how people judge the recent past and how they read the near future.

The median rate of perceived inflation over the previous 12 months held at 3.5% in August, exactly where it stood in July. But look forward, and the numbers shift. Median expectations for inflation over the next 12 months increased to 3.0%, up from 2.9% the month before. The pattern repeats further out: expectations three years ahead rose to 2.9% from 2.7% in July, and five-year expectations climbed to 2.5% from 2.4%.

None of these moves is dramatic on its own. Taken together, though, they suggest households across the region are quietly revising their long-term inflation assumptions upward, even without a corresponding jump in how they view current price pressures.

Uncertainty still elevated after Middle East conflict

Uncertainty about where inflation is headed over the next 12 months actually decreased in August. Even so, it remains above the level seen before the conflict in the Middle East began, according to the ECB survey. That detail is a reminder that geopolitical shocks can leave a lingering imprint on how confident consumers feel about their own forecasts, well after the initial spike in uncertainty fades.

Income and age gaps in inflation views

Inflation is not experienced uniformly across households, as those in the bottom income quintile kept reporting, on average, higher inflation perceptions and expectations than their counterparts in the top quintile. Age also plays a role: younger respondents, aged 18 to 34, reported lower inflation perceptions and expectations than their older counterparts in the 35-54 and 55-70 brackets. This pattern has shown up consistently in previous waves of the survey, and it points to a persistent divide in how inflation is experienced across income and generational lines.

Income and Spending Growth Expectations Show Stability

While inflation expectations edged higher, income and spending forecasts barely moved. Consumers’ expectations for nominal income growth over the next 12 months stayed unchanged at 1.0%, the same figure recorded in prior months.

That stability masks a wide gap between income groups. As in previous surveys, expectations were higher in the bottom income quintile, at 1.7%, than in the top quintile, at just 0.7%. Lower-income households, in other words, expect their pay to grow faster than higher earners do, even though their overall income base is smaller.

On the spending side, perceived nominal spending growth over the past 12 months actually rose slightly, to 5.2% from 5.1% in July. But expected nominal spending growth over the next 12 months remained unchanged at 3.6%. This suggests households have noticed spending pick up recently, without extending that same pace of increase into their own forward-looking budgets.

Economic Growth and Labour Market Outlook

Euro area consumers still expect the economy to contract over the coming year, not expand. Expectations for economic growth over the next 12 months held at -1.2% in August, unchanged from the prior reading. A negative growth expectation of this size, repeated month after month, signals that households aren’t anticipating a quick turnaround in broader economic conditions.

The labour market picture looks somewhat brighter, at least at the margins. Expectations for the unemployment rate 12 months ahead decreased to 11.0%, down from 11.2% in July. That’s a modest improvement, but it comes on top of a perceived current unemployment rate of 10.5%, meaning consumers expect only a slight worsening in joblessness over the coming year rather than a sharp deterioration.

Income disparities show up here too. Households in the bottom income quintile expected the highest unemployment rate 12 months ahead, at 13.4%, while those in the top income quintile expected the lowest, at 9.4%. That four-point-plus gap between income groups underscores how differently economic risk is distributed and perceived across the euro area’s population.

Housing Market and Credit Access Expectations

According to the same survey, little movement is anticipated in home prices and mortgage costs, with consumers projecting a 3.4% rise in their homes’ value over the coming 12 months, matching June’s prior reading. Once again, income shapes the outlook: expectations for home price growth remained on average higher in the lowest income quintile, at 4.0%, than in the highest quintile, at 3.2%.

Mortgage interest rate expectations for 12 months’ time also held steady at 4.9%, unchanged from July. Here too the income divide is stark. Households in the top income quintile expected the lowest mortgage interest rates 12 months ahead, at 4.4%, while those in the bottom quintile expected the highest, at 5.7%. That’s a spread of well over a full percentage point between the two ends of the income scale, a gap that could shape very different borrowing decisions depending on where a household sits.

On credit access, the news leans slightly positive. The net percentage of households reporting a tightening of access to credit over the previous 12 months declined compared with July. The net percentage expecting tighter credit conditions over the next 12 months also fell. In practice, this points to households feeling somewhat less squeezed by lenders than they did a month earlier, and expecting that easier trend to continue.

Why This Data Matters

Taken as a whole, the August wave of the ecb inflation expectations survey paints a picture of a euro area population that isn’t panicking about inflation, but is quietly revising its expectations upward across every time horizon. That matters for the ECB’s own policy calculus, since consumer expectations feed into how the central bank reads the durability of price pressures.

At the same time, the persistent gap between income groups, whether on inflation, unemployment, or mortgage rates, suggests that any policy response calibrated to the “median” household risks understating how unevenly economic pressure is actually distributed. Lower-income households consistently expect worse outcomes across nearly every metric tracked in this survey, from inflation to joblessness to borrowing costs.

The survey covers roughly 19,000 adult consumers across 11 euro area countries, including Belgium, Germany, Ireland, Greece, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland. Fieldwork for this wave ran between 6 and 24 August 2026. The ECB has stressed that the survey results reflect consumer views and do not represent the positions of the central bank’s own decision-making bodies or staff.

The next release, covering September data, is scheduled for 23 October 2026.