Projections for inflation over a three-year horizon remained steady at 2.4%, while expectations over five years were stable at 2.1% for the seventh consecutive month.
The uncertainty regarding inflation expectations for the upcoming 12 months remained unchanged in June.
Overall, the evolution of perceptions and expectations of inflation followed similar trends among different income groups.
Younger respondents (aged 18 to 34) continued to report lower inflation perceptions and expectations than older respondents (aged 35 to 54 and 55 to 70), although the difference was smaller than in previous years.
Regarding income and consumption, consumers’ expectations for nominal income growth over the next 12 months remained at 1% in June.
This apparent stability masks a decrease in expectations among higher-income individuals, offset by an increase among lower-income groups, as explained by the ECB.
The expected nominal growth of spending for the next 12 months decreased to 3.2% in June, down from 3.5% in May and 3.7% in April.
This decline reflects the increasing economic uncertainty in recent months, as well as lower expected inflation, notes the ECB.
Expectations for economic growth over the next 12 months became less negative, changing from -1.9% in April to -1.1% in May and -1% in June.
The 12-month unemployment rate expectations slightly decreased to 10.3% in June, down from 10.4% in May.
Consumers continue to expect the future unemployment rate to be only slightly higher than the currently perceived rate of 9.8%, suggesting a stable outlook for the labor market.
Conversely, consumers anticipate that the price of their housing will increase by 3.1% over the next 12 months, a slight decrease from 3.2% in May.
Expectations for mortgage rates over 12 months fell to 4.3% from 4.4% in May.
As in previous months, lower-income households expected higher mortgage rates at 12 months (4.9%), while higher-income households expected lower rates (3.9%).
The percentage of families expecting tighter credit conditions over the next 12 months decreased slightly.
