Inflation

“Looking ahead to 12 months from now, what do you think will happen to prices in general?” In response to this question, asked in the ECB’s , Europeans in June were more optimistic than in the previous month: median expectations for the future inflation rate stood at 3.4%, down from 3.9% in May.

When the question was changed to look at the next three years, the median response was 2.3%, down from 2.5% a month earlier.

Given that the median rate of perceived inflation looking back (over the past 12 months) was 8%, both in June and May, the survey respondents’ inflation expectations for the future remained much lower.

The report points out that people aged 18-34 tended to report lower inflation perceptions and expectations compared to older respondents.

Income and consumption

Consumers in Europe expected their income, over the next year, to increase by 1.2%. This number remains unchanged compared to responses in May.

Economic growth and labour market

Looking 12 months down the road, survey respondents took a negative view of economic growth, collectively foreseeing a growth rate of -0.6%. However, this is slightly less negative than their view in May, which stood at -0.7%.

Asked what the employment rate would be in a year, the median expectation was 11%, same as the month prior. The perceived current unemployment rate is nearly the same, 10.9%, meaning that people believe the labour market to be stable.

Overall, expectations for future economic growth and unemployment were more upbeat than in March, when the numbers were -1% and 11.7%, respectively.

Housing

Survey respondents expected their homes to increase in value by 2.1% over the next year, while their feeling on mortgage interest rates, at the same future moment, was that the rate would be 5% (down from 5.1% in May).

Access the full report .