consumer inflation — Consumer inflation perceptions have surged, according to the European Central Bank (ECB)’s survey for April 2026. The latest findings reveal a notable shift in euro area households’ sentiment towards inflation, income, and growth.
Consumer inflation: Inflation Concerns on the Rise
The ECB Consumer Expectations Survey indicates that the median perceived inflation over the past 12 months has risen significantly to 4.0 per cent in April, up from 3.5 per cent in March. This increase reflects growing anxiety among consumers regarding price developments.
Stability Amid Short-Term Volatility
Despite the rising short-term inflation perceptions, longer-term inflation expectations appear more stable. Expectations for inflation three years ahead slightly decreased to 2.9 per cent from 3.0 per cent, while the five-year outlook remained unchanged at 2.4 per cent. The ECB reported that this stability suggests a degree of anchoring in long-term sentiment despite the fluctuations observed in the immediate term.
Income and Spending Trends
In terms of income and expenditure, anticipated nominal income growth for the next 12 months has dropped to 0.8 per cent from 1.2 per cent the previous month. Conversely, perceived nominal spending growth over the past year has seen a slight increase, rising to 5.3 per cent from 5.1 per cent.
Households have also adjusted their consumption outlook, with expected nominal spending growth for the coming year climbing to 4.3 per cent from 4.1 per cent. Interestingly, lower-income households are predicting slightly stronger spending growth compared to their higher-income counterparts.
Macroeconomic Sentiment Deteriorates
The survey revealed a more negative macroeconomic outlook, with economic growth expectations for the next 12 months declining to -2.2 per cent in April from -2.1 per cent in March. This shift underscores increasing concerns about future economic performance.
Despite these negative growth sentiments, the anticipated unemployment rate for the next year has eased slightly to 11.2 per cent from 11.3 per cent. However, lower-income households continue to expect a higher unemployment rate of 13.3 per cent, compared to 9.4 per cent anticipated by higher-income groups.
Labour Market Insights
Consumers’ outlook on the labour market remains relatively stable. Current unemployment perceptions indicate a rate of 10.5 per cent, with expectations for future unemployment slightly above this figure. The ECB’s quarterly labour market data presents mixed signals, revealing that unemployed respondents have reported an increased probability of finding a job, which rose to 32.1 per cent in April from 30.1 per cent in January. Conversely, employed respondents indicated a higher expected probability of job loss, increasing to 8.8 per cent from 8.2 per cent during the same period.
Housing Market Expectations
In the housing sector, consumers maintain their expectations for house prices to rise by 3.7 per cent over the next year, unchanged since March. Notably, lower-income households expect stronger growth in home prices at 4.0 per cent, while higher-income groups anticipate a more modest increase of 3.4 per cent.
Credit Conditions Tightening
Consumers also face tightening credit conditions, with the net share of households reporting more restricted access to credit reaching its highest level since February 2024. Expectations for future credit conditions appear pessimistic, with the percentage anticipating further tightening rising to levels not seen since October 2023.
Moreover, actual credit demand has diminished, with the share of consumers applying for credit falling to 13.4 per cent in April from 14.8 per cent in January, marking the lowest level since April 2023.
