Eurozone consumers see lower inflation, higher spending ahead: ECB

Median expectations for inflation over the next 12 months decreased to 2.7 per cent, from 2.8 per cent in August. Expectations for inflation three years ahead were unchanged at 2.5 per cent, as were those for five years ahead, which remained unchanged at 2.2 per cent. Uncertainty about inflation expectations over the next 12 months remained unchanged in September, ECB said in a press release.

Consumers’ nominal income growth expectations for the next 12 months were stable at 1.1 per cent, whereas expected spending growth rose to 3.5 per cent from 3.3 per cent in August. Lower-income households continued to anticipate slightly stronger spending increases than higher-income groups.

Expectations for economic growth remained at -1.2 per cent, reflecting mild pessimism about near-term expansion. The expected unemployment rate in 12 months’ time was unchanged at 10.7 per cent, close to the perceived current rate of 10.2 per cent, indicating a broadly stable labour market outlook, added the release.

Lower-income respondents continued to report slightly higher inflation perceptions and short-term expectations than higher-income groups, consistent with trends since 2023. However, overall inflation views remained aligned across income levels. Younger respondents (18–34) again showed lower inflation perceptions and expectations compared to older age groups (35–54 and 55–70).

ALCHEMPro News Desk (SG)