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 edged up and those for three years ahead were unchanged, while expectations for economic growth over the next 12 months became more negative.
Median annual inflation expectations rose by 0.1% to 2.5%, but are still lower than any other month since September 2021. Three-year inflation expectations remained unchanged at 2.1%, their lowest level since February 2022. ECB said that uncertainty about inflation expectations over the next 12 months remained unchanged, also at its lowest level since February 2022.
The survey also found that consumer expectations for nominal income growth were 1.1%, compared with 1.3% in September. The decline was mostly driven by the highest two income quintiles. Expectations for nominal spending growth over the next 12 months reached 3.3%, compared with 3.2% in September. Economic growth expectations for the next 12 months turned more negative, to stand at -1.1%, compared with -0.9% in September. Meanwhile, expectations for the unemployment rate 12 months ahead fell by 0.2% to 10.4%. Consumers expected the price of their home to increase by 2.8% over the next 12 months, unchanged from September. Expectations for mortgage interest rates 12 months ahead declined by 0.1%, to 4.6%, 0.9% lower than their peak in November 2023 and the lowest level since August 2022.