European Central Bank reports May consumer survey shows one year inflation expectations down to 3.5% while longer term expectations hold steady

The European Central Bank published the latest results from its Consumer Expectations Survey, showing that euro area consumers lowered their median inflation expectations for the next 12 months to 3.5% in May from 4.0% in April, while expectations for inflation three years ahead stayed at 2.9% and five years ahead at 2.4%. Perceived inflation over the previous 12 months was unchanged at 4.0%. The survey also showed higher expected nominal income growth over the next 12 months at 1.0%, lower expected spending growth at 3.8%, and a less negative economic growth outlook at minus 1.7%. Labour market expectations weakened slightly, with the expected unemployment rate in 12 months edging up to 11.3% from 11.2%, although consumers still saw the future rate as only slightly above the perceived current rate of 10.7%. In housing, expected home price growth eased to 3.6% from 3.7%, while mortgage rate expectations were unchanged at 4.9%. The net share of households reporting tighter access to credit over the previous 12 months rose further to its highest level since February 2024, though the net share expecting tighter credit conditions over the next 12 months fell. The ECB also noted that uncertainty around near-term inflation expectations declined but remained above levels seen before the start of the war in the Middle East. The release of the Consumer Expectations Survey results for June is scheduled for 24 July 2026.