French households overestimate inflation by eight percentage points
A Banque de France survey of 4,000 residents shows perceived inflation averaged 9.5 percent in late 2025, compared with measured inflation of 0.8 percent. Over 80 percent of respondents reported purchasing power losses since 2021 despite aggregate real income gains.
Sticky memories outlast disinflation
The Banque de France-CSA survey reveals that French households continued to perceive inflation at an average of 9.5 percent at the end of 2025, widening the gap with measured annual inflation of 0.8 percent to over 8 percentage points.
Recollections of the 2022–2023 price surge remain heavily anchored in cumulative food costs, which rose 20 percent between 2021 and 2025.
Although food inflation slowed to 1.0 percent in 2025, 80 percent of respondents believed fruit and vegetable prices rose significantly.
Consequently, 63 percent of households altered their spending habits since 2021, and 90 percent retained adaptations like postponing purchases or switching to cheaper items.
Statistical gains meet perceived losses
The study identifies strong loss aversion in household perceptions.
While 95 percent of respondents noticed food price increases during 2023, only 5 percent registered the 15 percent drop in electricity prices in 2025.
Perceptions of income also diverged from official data.
Approximately 75 percent of respondents reported stagnant or falling nominal incomes between 2021 and 2025, even though per capita disposable income increased by 20 percent and minimum wages grew over 15 percent.
Hard data cannot cure subjective scars
Persistent inflation scars demonstrate that nominal disinflation does not automatically restore consumer confidence.
When households anchor expectations to price levels rather than rates of change, standard policy transmission weakens.
Central banks must treat subjective perception as a distinct macroeconomic barrier.