Consumers in the euro area expected inflation over the next year to remain at 2.8% in December, while their view of inflation over the past 12 months edged up to 3.2%.
The median rate of perceived inflation over the previous 12 months rose to 3.2% in December from 3.1% in November, while median expectations for inflation over the next 12 months were unchanged at 2.8%, the European Central Bank’s latest Consumer Expectations Survey released on Friday showed.
Looking further ahead, median inflation expectations increased to 2.6% for three years ahead from 2.5%, and to 2.4% for five years ahead from 2.2%.
Lower-income respondents continued to report slightly higher inflation perceptions and short-term expectations than higher-income households, while people aged 18 to 34 reported lower inflation perceptions and expectations than older respondents, the ECB said.
Income, jobs and housing expectations
Consumers’ expectations for nominal income growth over the next 12 months slipped to 1.1% in December from 1.2% in November, while expected nominal spending growth over the next 12 months held steady at 3.4%, according to the survey results.
Economic growth expectations for the next 12 months became less negative, with the median moving to -1.1% in December from -1.3% in November.
At the same time, consumers’ expected unemployment rate 12 months ahead increased to 11.0% from 10.9%, while the perceived current unemployment rate stood at 10.5%.
Households expected the price of their home to rise by 3.6% over the next 12 months, up from 3.4% in November, and expected mortgage interest rates in 12 months’ time to increase slightly to 4.7% from 4.6%.
The findings come from the ECB’s monthly online survey of around 19,000 adults across 11 euro area countries.
