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Short- and medium-term inflation expectations moved lower
The European Central Bank's July 2026 Consumer Expectations Survey reported that median expected inflation over the next 12 months fell to 2.9% from 3.0% in June. The median expectation three years ahead declined to 2.7% from 2.8%, while the five-year expectation remained unchanged at 2.4%.
Consumers' estimate of inflation experienced during the previous 12 months also edged down, to 3.5% from 3.6%. These are survey responses about perceived and expected price changes. They are not the same thing as the official Harmonised Index of Consumer Prices.
Measured inflation rose while expectations eased
Eurostat reported that euro-area annual inflation was 2.9% in July, up from 2.8% in June. Energy made the largest annual contribution among the main components, with an annual rate of 10.3%, while services inflation was 3.3%.
There is no contradiction in measured inflation rising while survey expectations fall. Official inflation describes how a defined basket of prices changed over a completed period. Expectations describe what households think will happen in the future. Consumers may judge a recent price shock to be temporary, or they may be responding to different prices and personal circumstances.
The survey covers about 19,000 adults in 11 countries
The ECB conducted the latest fieldwork from 2 to 27 July. The monthly online survey currently includes around 19,000 adults across Belgium, Germany, Ireland, Greece, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland.
The survey complements official price, wage and activity data; it does not replace them. The ECB also states that the results do not represent the views of its decision-making bodies or staff. Unless otherwise noted, the release uses a two-percent winsorised mean to reduce the influence of extreme responses.
Expected income growth weakened while spending growth stayed high
Expected nominal income growth for the next 12 months fell to 1.0% from 1.1%. Expected nominal spending growth remained at 3.6%, while perceived spending growth over the previous 12 months stayed at 5.1%.
Nominal figures are not adjusted for inflation. If spending is expected to rise faster than income, the gap can reflect higher prices, changes in quantities purchased, use of savings, borrowing or differences between households. The survey alone cannot determine which mechanism will dominate.
Growth expectations improved but remained negative
Consumers expected the economy to contract by 1.2% over the next 12 months, an improvement from the 1.4% decline expected in June. A less negative reading signals reduced pessimism, not an expectation of positive growth.
The expected unemployment rate 12 months ahead was unchanged at 11.2%. Lower-income respondents expected 13.5%, compared with 9.4% among higher-income households, illustrating how aggregate expectations can conceal large differences across groups.
Quarterly job-market answers showed more caution
Unemployed respondents placed the probability of finding a job within three months at 30.8% in July, down from 32.1% in April. Employed respondents estimated a 9.8% probability of losing their job over three months, up from 8.8% in April.
These are self-reported probabilities rather than observed job flows. They can still matter because households that feel less secure may postpone purchases, build precautionary savings or avoid new borrowing. Later releases are needed to determine whether sentiment aligns with actual labor-market data.
Home-price expectations held steady as mortgage-rate expectations fell
Consumers expected their home's price to increase 3.4% over the next year, unchanged from June. Expected mortgage interest rates 12 months ahead declined to 4.9% from 5.0%.
The income split was again notable: lower-income households expected a 5.7% mortgage rate, compared with 4.4% among higher-income households. Perceived borrowing conditions depend on creditworthiness, loan structure and country-specific markets, so the survey expectation is not a rate quote available to every borrower.
More households applied for credit, but access remained uneven
The share of consumers reporting a credit application during the previous three months rose to 14.3% in July from 13.4% in April. More households said credit access had tightened over the past year, while fewer expected additional tightening over the next year.
Applications do not reveal approvals, loan amounts or pricing. Read the survey alongside bank-lending standards, interest rates and household balance-sheet data before inferring a broad improvement or deterioration in credit availability.
Why central banks monitor inflation expectations
Expectations can influence wage bargaining, price setting, saving and spending. If households and businesses broadly expect high inflation to persist, those beliefs can make inflation more difficult to reduce. Stable longer-term expectations can support confidence that price pressure will eventually return toward the central bank's objective.
A one-month decline does not determine monetary policy. The ECB assesses incoming inflation, wages, growth, financing conditions and the transmission of earlier decisions. Survey results are one input among many and do not promise a particular interest-rate path.
Read the survey with three important boundaries
First, distinguish perceptions, expectations and measured outcomes. Second, compare multiple horizons because short-term expectations may react more strongly to energy or food prices than five-year expectations. Third, examine the distribution across income and age groups instead of relying only on the median.
The next survey release is scheduled for 18 September 2026. Future waves may reverse, extend or complicate July's pattern. This article reports verified public data and provides educational interpretation; it does not predict markets or recommend buying, selling or holding any investment.
ECB consumer expectations in July 2026
| Measure | July 2026 | Previous comparison |
|---|---|---|
| Perceived inflation, past 12 months | 3.5% | 3.6% in June |
| Expected inflation, next 12 months | 2.9% | 3.0% in June |
| Expected inflation, three years | 2.7% | 2.8% in June |
| Expected inflation, five years | 2.4% | Unchanged from June |
| Expected nominal income growth | 1.0% | 1.1% in June |
| Expected nominal spending growth | 3.6% | Unchanged from June |
| Expected economic growth | -1.2% | -1.4% in June |
| Expected unemployment rate | 11.2% | Unchanged from June |
| Expected home-price growth | 3.4% | Unchanged from June |
| Expected mortgage interest rate | 4.9% | 5.0% in June |
Frequently asked questions
What did euro-area consumers expect inflation to be in July 2026?
The median expectation was 2.9% for the next 12 months, 2.7% for three years ahead and 2.4% for five years ahead.
Why did expectations fall when actual inflation rose?
Actual HICP inflation measures completed price changes, while expectations describe beliefs about future prices. Households may expect a recent source of inflation to fade.
Does the ECB survey predict the next interest-rate decision?
No. It is one policy-analysis input among inflation, wages, activity, financing conditions and other evidence.
How many people participate in the ECB Consumer Expectations Survey?
The monthly online survey currently covers around 19,000 adults in 11 euro-area countries.
What happened to mortgage-rate expectations?
The median expected mortgage interest rate 12 months ahead declined to 4.9% from 5.0% in June.
When is the next ECB consumer expectations release?
The ECB scheduled the August 2026 survey results for 18 September 2026.
Official sources
Definitions and methodology were checked against these primary resources. Consult the current documents for complete details.
European Central Bank — Consumer Expectations Survey results, July 2026 ↗Eurostat — Annual inflation up to 2.9% in the euro area ↗ECB — Consumer Expectations Survey methodology and data ↗Wikimedia Commons — European Central Bank headquarters image ↗Creative Commons — Attribution-ShareAlike 4.0 license ↗
