Norbert Nagel · CC BY-SA 3.0 · Wikimedia Commons · Source · License
[European Central Bank (ECB) Update] According to the ‘Consumer Expectations Survey (CES)’ published by the European Central Bank (ECB) on October 23, 2026, both inflation expectations for the next 12 months and the expected unemployment rate rose simultaneously compared to the previous month. While medium-to-long-term inflation forecasts remained stable, persistent economic growth concerns and tightened credit access continue to weigh on the sentiment of Eurozone households.
Short-term Inflation Expectations Rebound to 3.1%; Medium-to-Long-term Outlook Remains Steady
The European Central Bank (ECB) officially released the results of its September 2026 Consumer Expectations Survey, conducted across 11 Eurozone countries, on October 23. The median perceived inflation rate over the past 12 months rose by 0.1 percentage point to 3.6% in September, up from 3.5% in August. Furthermore, the median inflation expectation for the next 12 months increased from 3.0% the previous month to 3.1%, signaling renewed caution regarding short-term price pressure.
In contrast, medium-to-long-term inflation expectations maintained a relatively stable trend. Expected inflation for three years ahead stood at 2.9%, and for five years ahead at 2.5%, both remaining unchanged from the previous month’s results. Uncertainty regarding inflation projections for the next 12 months increased slightly, remaining above levels recorded prior to the outbreak of the conflict in the Middle East. By income group, the bottom 20% (lowest quintile) continued to perceive higher inflation rates and forecast higher future inflation compared to the top 20% (highest quintile), while individuals aged 18–34 expressed lower inflation perceptions and expectations than those aged 35 and older.
Household Income and Spending Growth Outlooks Rise Amidst Income-based Divergence
Regarding household finances, the expectation for nominal income growth over the next 12 months rose slightly from 1.0% in August to 1.1% in September. Analysis by income quintile shows that the bottom 20% expected a 1.5% increase in nominal income, higher than the 1.2% expected by the top 20%. This suggests that lower-income households hold relatively higher expectations for future income improvement.
In terms of consumption, perceived nominal spending growth over the past 12 months ticked up from 5.2% in August to 5.3% in September. Expectations for how much nominal spending would increase over the next 12 months were adjusted upward by 0.1 percentage point to 3.7% from 3.6% the previous month, reflecting the ongoing burden of household living costs alongside inflationary pressures.
GDP Growth Outlook Slips to -1.5%; Unemployment Expectations Continue to Rise
Households’ views on the macroeconomic environment and the labor market deteriorated further. The median expectation for GDP growth over the next 12 months fell from -1.2% in August to -1.5% in September, deepening concerns regarding a recession in the Eurozone as households feel the increased likelihood of economic contraction.
Regarding the labor market, the expected unemployment rate 12 months ahead rose by 0.3 percentage point to 11.3% in September from 11.0% in August. This is higher than the current perceived unemployment rate of 10.6%. However, the fact that future unemployment is expected to be only slightly higher than current perceptions suggests an expectation of a relatively mild cooling rather than a sharp contraction in the labor market. By income group, the bottom 20% expected the highest unemployment rate at 13.6%, while the top 20% anticipated 9.7%, highlighting a clear gap in employment anxiety across socioeconomic levels.
Rising Home Price Expectations Amidst Mortgage Cost Burdens and Tightening Credit
In the housing market, expectations for nominal home price growth over the next 12 months rose slightly to 3.5% in September from 3.4% in August. The bottom 20% of income earners expected a 4.0% increase in home prices, compared to 3.2% for the top 20%. The forecast for mortgage interest rates 12 months ahead remained at 4.9%, consistent with July and August survey results. Disparities in financial access were evident: top earners expected a mortgage rate of 4.4%, while lower-income households anticipated a significantly higher rate of 5.7%.
Regarding financial access, the net percentage of households reporting that credit conditions had tightened over the past 12 months increased compared to August. Furthermore, the net percentage of households expecting credit access, such as loans, to become more difficult over the next 12 months also rose, indicating that the borrowing threshold perceived by Eurozone households continues to climb.
Survey Overview, Key Indicators, and Official Publication Schedule
The trends for key indicators summarized from the September 2026 survey are as follows:
- Inflation expectations (12 months ahead): 3.0% in August → 3.1% in September (+0.1 p.p.)
- Inflation expectations (3 years ahead): 2.9% in August → 2.9% in September (unchanged)
- Expected GDP growth (12 months ahead): -1.2% in August → -1.5% in September (-0.3 p.p.)
- Expected unemployment rate (12 months ahead): 11.0% in August → 11.3% in September (+0.3 p.p.)
- Expected mortgage interest rate (12 months ahead): 4.9% in August → 4.9% in September (unchanged)
The survey was conducted online between August 27 and September 28, 2026, involving approximately 19,000 adult consumers across 11 Eurozone countries including Belgium, Germany, Ireland, Greece, Spain, France, Italy, the Netherlands, Austria, Portugal, and Finland. The ECB explicitly stated that this survey represents statistical data on consumer perceptions and expectations and does not reflect the official views of the ECB’s decision-making bodies or executive board. The next Consumer Expectations Survey for October 2026 is scheduled for release on November 27, 2026.
Official Source:
European Central Bank Press Release (Published October 23, 2026)