ECB Consumer Expectations Survey shows inflation outlook rise

Investing.com -- The European Central Bank’s Consumer Expectations Survey for August 2025 revealed an increase in consumers’ inflation expectations for the next 12 months to 2.8%, up from 2.6% in July.

The survey, released on Friday, showed that median inflation expectations for five years ahead also increased slightly to 2.2% from 2.1%, reaching the highest level observed since August 2022. Meanwhile, expectations for inflation three years ahead remained unchanged at 2.5%.

Consumers’ perceptions of inflation over the previous 12 months held steady at 3.1% for the seventh consecutive month.

The ECB survey also indicated that consumers expect their nominal income to grow by 1.1% over the next 12 months, an increase from 0.9% in July. Expected nominal spending growth remained unchanged at 3.3%.

Economic growth expectations for the next 12 months stayed stable at -1.2%, while unemployment rate expectations increased slightly to 10.7% from 10.6% in July.

Lower-income households continued to expect higher unemployment rates (12.6%) compared to higher-income households (9.3%).

In the housing sector, consumers anticipated their home prices would increase by 3.4% over the next 12 months, slightly up from 3.3% in July. Expectations for mortgage interest rates remained stable at 4.5%.

The survey also revealed that more households reported experiencing tighter credit conditions over the past 12 months, and more expected credit conditions to tighten further in the coming year.

The ECB conducts this monthly online survey with approximately 19,000 adult consumers from 11 euro area countries. The next Consumer Expectations Survey results will be released on October 27, 2025.

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