Euro Area Inflation Expectations Edge Up Amid Persistent Uncertainty

Consumer inflation expectations in the Euro Area have edged up, according to recent data. The median expectation for price growth over the next 12 months increased to 3% in August 2026 from 2.9%. This change was seen across multiple time horizons, with expectations for inflation three years ahead rising to 2.9% from 2.7%, and the five-year outlook increasing to 2.5% from 2.4%

The shift in consumer attitudes towards inflation remains a concern, as uncertainty about expectations for price growth over the next 12 months decreased but remained higher than before the start of the conflict in the Middle East.

Interestingly, lower-income households continued to perceive and anticipate higher inflation than their higher-income counterparts, while younger consumers maintained more moderate expectations than older respondents. Nominal income growth expectations were unchanged at 1%, with economic growth expected to remain stagnant at -1.2%.