ECB survey showed shorter- and medium-term inflation expectations eased from May, while the five-year outlook held steady at 2.4% and spending, housing and labor market views also shifted.
Euro zone consumers lowered their inflation expectations in June, with the median 12-month outlook falling to 3.0% from 3.5% in May in the European Central Bank's Consumer Expectations Survey, the second consecutive monthly decline and the lowest reading since February 2026. Expectations for inflation three years ahead also edged down to 2.8% from 2.9%, while the five-year view was unchanged at 2.4%. The survey also showed consumers expected their home prices to rise 3.4% over the next 12 months, down from 3.6% in May, while expectations for mortgage interest rates rose to 5.0% from 4.9%. Expected nominal spending growth over the next 12 months slowed to 3.6% from 3.8%. Consumers became slightly less pessimistic about the economy, with expected growth over the next 12 months improving to -1.4% from -1.7%, and they saw the unemployment rate 12 months ahead easing to 11.2% from 11.3%. Uncertainty about inflation over the next 12 months decreased for a second straight month, though it remained above levels seen before the start of the war in the Middle East.