The results of a survey of around 19,000 adults from 11 euro area countries, presented by the European Central Bank (ECB), showed that median inflation expectations for the next 12 months and for three years ahead decreased compared to July, while expectations for economic growth over the next 12 months became less negative.
Median annual inflation expectations decreased by 0.1% to 2.7% (the lowest value since September 2021). Three-year inflation expectations also fell by 0.1%, reaching 2.3%. ECB said that uncertainty about inflation expectations over the next 12 months remained unchanged at its lowest level since February 2022.
The survey also found that consumer expectations for nominal income growth were 1.2%, compared with 1.1% in July. The increase was mainly driven by the lowest two quintiles. Expectations for nominal spending growth over the next 12 months remained stable at 3.2% (lowest level since February 2022). Economic growth expectations for the next 12 months were -0.9%, compared with -1.0% in July. Meanwhile, expectations for the unemployment rate 12 months ahead decreased to 10.4% (lowest level since the start of the series) from 10.6% in July. Consumers expected the price of their home to increase by 2.7% over the next 12 months, up from +2.6% in July. Expectations for mortgage interest rates 12 months ahead remained stable at 4.8%, while the lowest income households expected the highest mortgage interest rates 12 months ahead (5.5%).