Euro Area Inflation Expectations

Median consumer inflation expectations in the Eurozone were unchanged at 2.6% in July 2025, remaining at the lowest since February. Expectations for inflation three years ahead increased to 2.5% from 2.4%, while expectations for five years ahead held steady at 2.1% for the eighth consecutive month. Lower income quintiles continued to report on average slightly higher inflation perceptions and short-horizon expectations than higher income quintiles, a trend observed since 2023. However, the broad evolution of inflation perceptions and expectations remained relatively closely aligned across income groups. Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (aged 35-54 and 55-70), albeit to a lesser degree than in previous years. In addition, economic growth expectations for the next 12 months became more negative (-1.2% vs -1%) and expectations for the unemployment rate 12 months ahead increased to 10.6% from 10.3%.