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Story · Eurozone · 21 Aug 2026

Euro-area households lowered near-term inflation expectations

In the ECB's July 2026 Consumer Expectations Survey, median household inflation expectations were 2.9% for the next 12 months, 2.7% three years ahead and 2.4% five years ahead.

InflationMonetary Policy
Relevance date 21 Aug 2026, 08:00Updated 30 Aug 2026, 06:31Exam relevance 89/100
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Verified sources

Check the original evidence before reading the explanation.

Primary sourceEuropean Central Bank →ECB Consumer Expectations Survey results – July 2026Supporting sourceEuropean Central Bank →ECB Consumer Expectations Survey results – July 2026
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2.7%

Euro-area median inflation expectation, 3 years ahead (July 2026 survey)

2.4%

Euro-area median inflation expectation, 5 years ahead (July 2026 survey)

2.9%

Euro-area median inflation expectation, next 12 months (July 2026 survey)

Exam link: Inflation expectations → wage and price setting → inflation persistence → monetary policy

Story toolsReport / correction
Understand the storyExpand

The ECB surveyed about 19,000 adults in 11 euro-area countries between 2 and 27 July 2026. Median expected inflation fell to 2.9% over the next 12 months from 3.0% in June and to 2.7% three years ahead from 2.8%; the five-year expectation remained 2.4%.

What happened

The July 2026 survey found median inflation expectations of 2.9% for the next 12 months, 2.7% three years ahead and 2.4% five years ahead. Expected nominal income growth over the next 12 months fell to 1.0% from 1.1% in June. The survey fieldwork ran from 2 to 27 July across roughly 19,000 adults in 11 euro-area countries.

Why it matters

Inflation expectations can affect wage demands, household spending and firms' pricing. If expectations become persistently higher, temporary price shocks are more likely to feed into wages and prices, making it harder for the ECB to return inflation to target.

Economic context

These figures are household survey expectations, not ECB forecasts and not observed future inflation. They should be used as evidence about expectations and possible second-round effects. The one-, three- and five-year horizons must be kept separate because they measure different beliefs about the future path of prices.

All key dataExpand
Expected nominal income growth, next 12 months (July 2026 survey)
1.0%
Euro-area median inflation expectation, 3 years ahead (July 2026 survey)
2.7%
Euro-area median inflation expectation, 5 years ahead (July 2026 survey)
2.4%
Euro-area median inflation expectation, next 12 months (July 2026 survey)
2.9%
Use it in an examExpand

Evidence

In the ECB's July 2026 Consumer Expectations Survey, median household inflation expectations were 2.9% for the next 12 months, 2.7% three years ahead and 2.4% five years ahead.

Explain

Inflation expectations can affect wage demands, household spending and firms' pricing. If expectations become persistently higher, temporary price shocks are more likely to feed into wages and prices, making it harder for the ECB to return inflation to target.

Evaluate

These figures are household survey expectations, not ECB forecasts and not observed future inflation. They should be used as evidence about expectations and possible second-round effects. The one-, three- and five-year horizons must be kept separate because they measure different beliefs about the future path of prices.

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