Eurozone Consumers Reassess Inflation Expectations Amid Low 12-Month Forecasts

Eurozone consumers are reevaluating their inflation expectations as median forecasts for the next 12 months dipped to 3% in June 2026, a two-month low. This marks a decline from May's 3.5%, which is the lowest level since February.

Home price growth expectations also saw a slight decrease, with consumers expecting a 3.4% increase over the next year, compared to 3.6% in May. Meanwhile, mortgage interest rate expectations rose to 5% from 4.9%

Inflation forecasts for three and five years ahead were mixed, with expectations for inflation three years ahead decreasing to 2.8% from 2.9%, but remaining unchanged at 2.4% for five years ahead.

Uncertainty about inflation over the next year continued its downward trend, albeit still higher than before the Middle East conflict began. Expected nominal spending growth decreased to 3.6% from 3.8% in May, while economic growth expectations improved slightly to -1.4% from -1.7%. Unemployment rate expectations for 12 months ahead also decreased to 11.2%.