The ECB's August Consumer Expectations Survey shows an increase in 12-month inflation expectations to 3.0%, while the perception of past inflation remains at 3.5%. Unemployment expectations drop to 11.0% and mortgage rates remain at 4.9%.
Consumers in the euro area expect inflation of 3.0% over the next twelve months, up from 2.9% in July, according to the Consumer Expectations Survey (CES) published by the European Central Bank (ECB). The perception of inflation over the past twelve months remained unchanged at 3.5%. Three-year expectations rose to 2.9% from 2.7%, and five-year expectations increased to 2.5% from 2.4%.
The fieldwork for this wave was conducted between 6 and 24 August 2026. Uncertainty about inflation over the next twelve months has decreased, although it remains above the level prior to the onset of the conflict in the Middle East. Households in the lowest income quintile continue to report a perception and expectations of inflation higher than those in the highest quintile. Respondents aged 18 to 34 have lower expectations than those aged 35 to 54 and 55 to 70.
“Twelve-month inflation expectations increased to 3.0% from 2.9% in July,” notes the ECB statement.
Regarding income, consumers expect nominal income growth of 1.0% over the next twelve months, unchanged. By quintiles, the expectation is 1.7% in the lowest quintile and 0.7% in the highest. The perceived nominal spending over the past twelve months rose to 5.2% from 5.1%, while expected spending over the next twelve months remained at 3.6%.
Expectations for economic growth over the next twelve months remained unchanged at -1.2%. The expected unemployment rate over the next twelve months dropped to 11.0% from 11.2% in July. Households in the lowest income quintile expect unemployment of 13.4%, compared to 9.4% in the highest quintile. The currently perceived unemployment rate is 10.5%, indicating a stable labour market.
In the housing sector, consumers expect their home prices to increase by 3.4% over the next twelve months, unchanged from June. The expectation is 4.0% in the lowest income quintile and 3.2% in the highest. Expected mortgage rates over the next twelve months remain at 4.9%: the highest quintile expects 4.4% and the lowest 5.7%. The net percentage of households reporting a tightening of access to credit in the past twelve months decreased from July, as did the percentage expecting more restrictive conditions in the next twelve months.
The next publication of CES results, corresponding to September, is scheduled for 23 October 2026.
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