ECB Consumer Survey shows mixed expectations for inflation, growth
The European Central Bank's Consumer Expectations Survey for December 2025 reveals mixed consumer outlooks, with inflation expectations for three and five years ahead increasing, while income growth expectations decreased. Economic growth expectations became less negative, and expected home price growth increased.
Inflation outlook mixed across horizons
In December, median perceived inflation over the previous 12 months rose slightly to 3.2 percent, up from 3.1 percent.
Median expectations for inflation over the next 12 months remained unchanged at 2.8 percent.
However, expectations for inflation three years ahead increased to 2.6 percent from 2.5 percent, and five years ahead rose to 2.4 percent from 2.2 percent.
Uncertainty about short-term inflation expectations was stable.
Lower income quintiles continued to report slightly higher inflation perceptions and short-horizon expectations compared to higher income groups, a trend consistent since 2023, though overall evolution remained aligned across groups.
Younger respondents (aged 18-34) reported lower perceptions and expectations than older age groups.
Income expectations decline, housing outlook improves
Nominal income growth expectations for the next 12 months decreased to 1.1 percent in December from 1.2 percent.
Expected nominal spending growth remained unchanged at 3.4 percent, reflecting divergent trends across income quintiles.
Economic growth expectations for the next 12 months became less negative, rising to -1.1 percent from -1.3 percent.
Expectations for the unemployment rate 12 months ahead increased slightly to 11.0 percent from 10.9 percent.
Home price growth expectations for the next 12 months increased to 3.6 percent from 3.4 percent, and mortgage interest rate expectations also rose to 4.7 percent from 4.6 percent.