Eurozone households lifted their inflation expectations in August, according to the ECB’s latest survey. Median expectations for the next 12 months rose to 2.8% from 2.6% in July, while five-year expectations climbed from 2.1% to 2.2%, the highest since August 2022. Three-year expectations were steady at 2.5%.
At the same time, the growth outlook remained grim, with respondents predicting output to shrink by -1.2% over the next 12 months. Job worries also inched higher, with unemployment expectations up to 10.7% from 10.6%.
The survey highlights a lingering inflation mindset among households, even as economic prospects stay fragile. For the ECB, the persistence of medium-term price expectations near or above target may limit the scope for further easing if growth continues to stagnate.
