By This Hour Finance Desk
Consumers in the euro area reported a small rise in both perceived inflation and expected inflation in September, while also becoming more pessimistic about growth and somewhat more concerned about unemployment, the European Central Bank’s latest Consumer Expectations Survey indicates. The figures point to a household outlook in which price pressures remain a prominent concern even as longer-term inflation expectations held steady.
The survey, published by the ECB on 23 October, recorded a median expectation of 3.1% for inflation over the following 12 months, up from 3.0% in August. Median perceptions of inflation over the previous year edged up to 3.6%, from 3.5%. Consumers also expected weaker economic growth and a higher unemployment rate a year ahead, while reporting slightly stronger expectations for nominal income, spending and home-price growth.
These are measures of what respondents believe has happened or will happen, rather than official inflation, labour-market or output data. Nor do they constitute an ECB staff forecast or a decision by the central bank’s policy-setting bodies. Their value lies in showing how households assess the pressures affecting their finances and the broader economy, including whether those views are shifting from month to month.
Near-term inflation expectations moved higher while longer views held firm
The most immediate shift in the September results was the increase in consumers’ one-year inflation outlook. The median respondent expected prices to rise by 3.1% over the next 12 months, a 0.1 percentage-point increase from August. The move was matched by a 0.1 percentage-point rise in perceived inflation over the prior 12 months, to 3.6%.
That pairing matters because survey respondents are asked to assess both the prices they believe they have experienced and the prices they expect to face. In this release, both readings moved in the same direction. The changes were small, but they did not suggest that households had become more comfortable with the near-term price outlook between August and September.
Expectations further ahead did not change. The median expectation for inflation three years out stayed at 2.9%, while the five-year measure remained at 2.5%. The contrast between the one-year increase and the unchanged medium- and longer-horizon readings is central to interpreting the survey: the published figures show a deterioration in the immediate outlook without a corresponding month-on-month shift in the reported three- or five-year view.
The ECB also said uncertainty around inflation expectations for the next 12 months increased slightly. It remained above the level recorded before the start of the conflict in the Middle East. That observation concerns the dispersion or uncertainty surrounding respondents’ expectations, not merely the median inflation estimate. A stable median can therefore sit alongside continuing differences in the confidence with which households form their views.
Perceptions and expectations differed across income and age groups. Respondents in the lowest income fifth continued, on average, to report higher inflation perceptions and expectations than people in the highest fifth. Those aged 18 to 34 continued to report lower perceived and expected inflation than respondents aged 35 to 54 and those aged 55 to 70. The release does not, on the supplied record, identify the specific reasons for those gaps. It does show that the aggregate median conceals materially different reported experiences among groups of consumers.
Income and spending figures show a persistent gap in household expectations
Consumers’ expected nominal income growth over the next 12 months rose to 1.1% in September, from 1.0% in August. The increase was modest. Yet it came alongside an increase in expected nominal spending growth, to 3.7% from 3.6%, leaving the two reported rates far apart.
The survey also found that perceived nominal spending growth over the previous 12 months rose to 5.3%, from 5.2% a month earlier. That retrospective spending measure was higher than the 3.7% rate consumers expected for the coming year. It is not a measure of actual household expenditure, and it does not establish why respondents expected a slower rate of spending growth. It nevertheless captures a distinction in their answers between what they thought had happened to spending and what they anticipated next.
Income expectations were not uniform. The lowest income fifth expected average nominal income growth of 1.5%, compared with 1.2% for the highest income fifth. The survey supplies those group averages, but it does not establish whether the difference reflects wages, transfers, job changes, household composition or another cause. The figures should therefore be read as reported expectations rather than evidence of realised income gains.
Placed beside the inflation responses, the income and consumption answers portray households expecting a relatively limited increase in nominal income while anticipating higher spending and inflation over the next year. That is an implication of the reported survey measures, not an estimate of changes in real disposable income or living standards. The release does not provide such an estimate in the supplied material.
Growth outlook weakened as unemployment expectations rose
Respondents became less positive about the economy over the coming year. Their expected rate of economic growth fell to minus 1.5% in September from minus 1.2% in August. A negative expectation is an expectation of contraction, but the figures are not a report that the economy has contracted by that amount and should not be treated as an official forecast for euro-area output.
At the same time, the expected unemployment rate 12 months ahead rose to 11.3%, from 11.0%. Consumers’ perceived current unemployment rate was 10.6%. The relatively narrow difference between the perceived current rate and the expected future rate led the ECB to describe the labour-market outlook as broadly stable, even though the expected rate increased from the previous month.
The survey again showed a wide income-group divide in unemployment expectations. Households in the lowest income fifth expected unemployment of 13.6% in 12 months, compared with 9.7% among those in the highest fifth. Those readings are respondents’ assessments of the future labour market. They are not the measured unemployment rates for the two groups, nor evidence that either outcome will occur.
Taken together, the growth and labour responses present a more cautious consumer assessment than in August. The change is directionally consistent across the two indicators: expected growth became more negative and expected unemployment moved higher. The material supplied does not establish which events, costs or employment conditions drove that change, and it does not attribute the shift to monetary policy or any particular economic development.
Housing expectations rose slightly, but credit access looked tighter
Consumers expected the price of their homes to increase by 3.5% over the next 12 months, up from 3.4% in August. The lowest income fifth expected 4.0% home-price growth, on average, versus 3.2% for the highest income fifth. Again, these are subjective forecasts by households, not an index of actual house-price changes.
Expected mortgage interest rates 12 months ahead stayed at 4.9%, unchanged from July. The stability of that measure came despite the slight rise in expected home-price growth. Expectations also varied by income: the highest income fifth anticipated mortgage rates of 4.4%, while the lowest income fifth expected 5.7%.
Credit access was a less reassuring part of the housing and finance responses. The net share of households saying access to credit had tightened over the previous 12 months increased from August. The net share expecting tighter conditions during the next 12 months also rose. A net measure compares respondents reporting tightening with those reporting easing; it does not mean every surveyed household encountered, or expects to encounter, more restrictive credit conditions.
The combination of a stable expected mortgage rate, slightly firmer home-price expectations and a reported worsening in credit access does not resolve into a single forecast for housing. Rather, it records distinct views held by respondents at the time of the survey. The release does not provide loan-approval outcomes, mortgage pricing data or transaction data that could test those perceptions.
A monthly gauge of perceptions, not a verdict on the economy
The September survey fieldwork ran from 27 August through 28 September. The ECB describes the Consumer Expectations Survey as a monthly online survey of around 19,000 adults in 11 euro-area countries: Belgium, Germany, Ireland, Greece, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland. Its aggregate results are used for policy analysis alongside other sources of information.
The release says that, unless otherwise indicated, its statistics use a 2% winsorised mean. This is a methodological treatment of aggregate responses and is relevant when comparing the published series, but it does not turn respondent expectations into observed economic outcomes. The ECB also makes underlying microdata available through its survey materials, according to the release.
For businesses, households and policymakers, the survey offers evidence of consumer sentiment around prices, income, employment, housing and borrowing. It does not provide investment guidance, an outlook for asset prices or a prediction of returns. Its September results show modestly higher near-term inflation expectations alongside more negative growth expectations and greater anticipated unemployment, while longer-run inflation views were unchanged.
The report has not been independently corroborated. This account is based solely on the ECB’s published survey release and the supplied source material; no external data or independent reporting was provided to confirm the responses or explain the movements reported in September. The ECB has scheduled release of its October Consumer Expectations Survey results for 27 November 2026.
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Reporting notes
What is confirmed: One-year inflation expectations rose to 3.1%; three- and five-year readings stayed at 2.9% and 2.5%. Expected growth fell to -1.5% and expected unemployment rose to 11.3%.
Why this matters: The survey tracks household views that can inform analysis of inflation, consumption, borrowing and labour-market conditions.
What remains unclear: The supplied release does not explain what drove the month-to-month changes or establish whether expectations will be realised. This report is based on one source and has not been independently corroborated.
