The European Central Bank (ECB) on Friday released the latest results of its Consumer Expectations Survey for June 2026, showing a broad easing in inflation expectations and a mixed outlook for income, spending, and growth.

Median consumer perceptions of inflation over the previous 12 months fell markedly to 3.6 per cent in June, down from 4.0 per cent in May.

Median expectations for inflation over the next 12 months also declined, dropping to 3.0 per cent from 3.5 per cent a month earlier.

Longer-term expectations were more stable, with inflation three years ahead edging down to 2.8 per cent from 2.9 per cent, while five-year expectations remained unchanged at 2.4 per cent.

Uncertainty around inflation expectations over the next 12 months decreased for a second consecutive month, although it remained above levels seen before the start of the war in the Middle East.

Lower-income households continued to report higher perceived and expected inflation than higher-income groups, while younger respondents aged 18 to 34 consistently reported lower figures than those aged 35 to 54 and 55 to 70.

Consumers’ expectations for nominal income growth over the next 12 months increased slightly to 1.1 per cent, up from 1.0 per cent in May.

At the same time, perceived nominal spending growth over the past year declined to 5.1 per cent from 5.4 per cent.

Expected nominal spending growth over the next 12 months also eased, falling to 3.6 per cent from 3.8 per cent, with households in the lowest three income quintiles anticipating slightly higher spending increases than those in the top two quintiles.

Expectations for economic growth over the next 12 months became less negative, improving to -1.4 per cent from -1.7 per cent in May.

The expected unemployment rate 12 months ahead declined marginally to 11.2 per cent from 11.3 per cent.

Lower-income households continued to expect the highest unemployment rate at 13.8 per cent, while higher-income households anticipated a significantly lower rate of 9.7 per cent.

Consumers’ expectations suggest the future unemployment rate will remain only slightly above the perceived current level of 10.7 per cent, pointing to a broadly stable labour market outlook.

In the housing sector, consumers expected the price of their home to rise by 3.4 per cent over the next 12 months, down from 3.6 per cent in May.

Households in the lowest income quintile continued to anticipate stronger house price growth at 3.7 per cent, compared with 3.2 per cent among those in the highest quintile.

Expectations for mortgage interest rates over the next 12 months increased slightly to 5.0 per cent from 4.9 per cent.

Lower-income households again expected higher mortgage rates at 5.8 per cent, while higher-income households anticipated lower rates of 4.4 per cent.

Meanwhile, the net percentage of households reporting a tightening in access to credit over the previous 12 months declined in June.

The net share of households expecting tighter credit conditions over the coming year also decreased, indicating a modest easing in credit expectations.