Consumers Raise Eurozone Inflation Expectations Above ECB Target

Euro-area consumers raised inflation expectations in August 2026 across one-, three-, and five-year horizons, according to the European Central Bank Consumer Expectations Survey published on 18 September 2026. Median one-year expectations rose to 3.0% from 2.9% in July, three-year to 2.9% from 2.7%, and five-year to 2.5% from 2.4%, all above the ECB's 2% target. Perceived inflation over the prior year was unchanged at 3.5%. Uncertainty about near-term expectations eased but remained above levels before the Middle East conflict. Expected nominal income growth held at 1.0% while expected spending growth was 3.6%. Consumers still foresaw a 1.2% contraction in economic activity; the expected unemployment rate 12 months ahead edged down to 11.0% from 11.2%. Home prices were expected to rise 3.4% over the next 12 months and mortgage interest rates 4.9%, unchanged from July. Lower-income households reported higher inflation and income-growth expectations than higher-income households; younger consumers held more moderate inflation expectations than older respondents. Center-rated coverage tied the rise to the Iran war and higher oil, fuel, and heating costs and framed the survey as pressure and an alarm signal for the ECB. Right-rated coverage stressed the increase across all horizons. No left-rated coverage was recorded. Any ECB policy response is not in the record.