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 remained unchanged and those for three years ahead edged up, while expectations for economic growth over the next 12 months became more negative.
Median annual inflation expectations again remained unchanged at 2.8% (for the third month in a row). Three-year inflation expectations rose to 2.4% from 2.3% in June. Inflation expectations at the one-year and three-year horizons remained below the perceived past inflation rate. 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 fell by 0.3%, to 1.1%. This decline was broad-based across age and income groups. Expectations for nominal spending growth over the next 12 months declined to 3.2% from 3.3% in June, reaching the lowest level since February 2022. Economic growth expectations for the next 12 months were -1.0%, compared to -0.9% in June. Meanwhile, expectations for the unemployment rate 12 months ahead remained unchanged at 10.6%, their lowest level since the start of the series. Consumers expected the price of their home to increase by 2.6% over the next 12 months, down from +2.7% in June. 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 (5.4%).