Euro Area Inflation Expectations Rise in August

Median consumer inflation expectations in the Eurozone increased to 2.8% in August 2025, the highest in three months, from 2.6% in July. Expectations for inflation three years ahead were unchanged at 2.5%, while expectations for five years ahead increased to 2.2%, the highest since August 2022. Lower income quintiles continued to report on average slightly higher inflation perceptions and short-horizon expectations than those in higher income quintiles, a trend observed since 2023. However, the broad evolution of inflation perceptions and expectations remained relatively closely aligned across income groups. Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (aged 35-54 and 55-70), albeit to a lesser degree than in previous years. Meanwhile, economic growth expectations for the next 12 months remained stable in August at -1.2% and expectations for the unemployment rate 12 months ahead increased to 10.7% from 10.6%.