Eurozone inflation expectations fall among consumers, ECB survey shows

Eurozone inflation expectations eased among households in June, according to the European Central Bank, with consumers lowering both their assessment of recent price rises and their outlook for the year ahead. The ECB’s Consumer Expectations Survey put perceived inflation over the past 12 months at a median 3.6%, down from 4.0% in May, and one-year-ahead expectations at 3.0%, down from 3.5%.

The findings, released by the ECB on Friday, point to a sharper shift in household views than in professional forecasts. In a separate quarterly survey, the ECB said professional forecasters left their 2026 headline inflation estimate unchanged at 2.7%, raised their 2027 view by 0.1 percentage points to 2.2%, and kept their 2028 estimate at 2.0%.

What did the ECB survey say about eurozone inflation expectations?

The consumer survey showed the largest movement in shorter-term inflation views. Households’ median expectation for inflation over the next 12 months fell to 3.0% in June from 3.5% in May, while their estimate of inflation already experienced over the prior year fell to 3.6% from 4.0%.

Longer-horizon expectations moved less. The ECB said consumers’ median expectation for inflation three years ahead edged down to 2.8% from 2.9%, while the five-year-ahead measure was unchanged at 2.4%.

Inflation expectations are survey-based gauges of how households or forecasters think prices will change in the future. Central banks monitor them because expectations can influence wage demands, price-setting and spending decisions, although surveys do not by themselves determine monetary policy.

The ECB also said uncertainty around one-year inflation expectations fell for a second month. That uncertainty, however, remained above the level seen before the start of the war in the Middle East, according to the central bank.

The survey continued to show a gap by income. Respondents in lower-income groups reported higher inflation perceptions and expectations, on average, than respondents in higher-income groups, the ECB said.

Professional forecasters kept a steadier view

The ECB’s Survey of Professional Forecasters for the third quarter showed fewer revisions than the consumer poll. Forecasts for headline inflation in 2026 stayed at 2.7%, while the 2027 projection rose slightly to 2.2%. The 2028 estimate remained at 2.0%.

Professional forecasters also addressed the war in the Middle East in a special question. The ECB said responses pointed to limited expected indirect and second-round effects, concentrated in 2026. For inflation, respondents saw risks tilted somewhat to the upside in 2026 and more balanced after that, according to the release.

The euro area results differ from a recent survey of American consumers cited by PYMNTS, which found median inflation expectations in the United States rose in June. PYMNTS Intelligence findings on financially constrained U.S. consumers, however, were broadly consistent with the ECB’s observation that lower-income households report greater inflation pressure, with those consumers cutting nonessential spending.

This story draws on original reporting from PYMNTS.