ECB Consumer Expectations Survey results – January 2025

28 February 2025

Compared with December 2024:

• median consumer perceptions of inflation over the previous 12 months decreased, as did median inflation expectations for the next 12 months, while median inflation expectations for three years ahead remained unchanged;
• expectations for nominal income growth over the next 12 months decreased, while expectations for spending growth over the next 12 months increased;
• expectations for economic growth over the next 12 months became less negative, while the expected unemployment rate in 12 months’ time decreased;
• expectations for growth in the price of homes over the next 12 months increased, while expectations for mortgage interest rates 12 months ahead declined.

Inflation

The median rate of perceived inflation over the previous 12 months decreased slightly in January to 3.4%, from 3.5% in December. Median expectations for inflation over the next 12 months also decreased, to 2.6% from 2.8%. In both instances, these decreases reversed the increases observed in the December 2024 data. Median expectations for inflation three years ahead were unchanged at 2.4% in January 2025. Inflation expectations at the one-year and three-year horizons thus remained below the perceived past inflation rate. Uncertainty about inflation expectations over the next 12 months remained unchanged, for the sixth month in a row, at its lowest level since February 2022. While the broad evolution of inflation perceptions and expectations remained relatively closely aligned across income groups, expectations for lower income quintiles were slightly above those for higher income quintiles. Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (those aged 35-54 and 55-70), albeit to a lesser degree than in previous years. (Inflation results)

Income and consumption

Consumers’ nominal income growth expectations over the next 12 months decreased to 0.9% in January from 1.1% in December. The drop in income growth expectations was mainly driven by the lowest income quintile, while the income growth expectations of the two highest quintiles remained unchanged. Perceived nominal spending growth over the previous 12 months decreased to 5.1% in January, from 5.2% in December, while expected nominal spending growth over the next 12 months increased to 3.6%, from 3.5% in December. (Income and consumption results)

Economic growth and labour market

Economic growth expectations for the next 12 months were less negative, standing at -1.1%, compared with -1.3% in December. Expectations for the unemployment rate 12 months ahead decreased to 10.4%, from 10.5% in December. Consumers continued to expect the future unemployment rate to be only slightly higher than the perceived current unemployment rate (9.9%), implying a broadly stable labour market. Quarterly data showed that unemployed respondents reported a decrease in their expected probability of finding a job over the next three months, which declined to 25.1% in January, from 29.3% in October. Employed respondents, by contrast, reported that their expected probability of job loss over the next three months decreased to 8.6% in January, from 9.0% in October. (Economic growth and labour market results)

Housing and credit access

Consumers expected the price of their home to increase by 3.0% over the next 12 months, which was slightly higher compared than in December (2.9%). Households in the lowest income quintile continued to expect higher growth in house prices than those in the highest income quintile (3.4% and 2.8% respectively), although the difference narrowed compared with earlier months. Expectations for mortgage interest rates 12 months ahead declined slightly to 4.5%, their lowest level since July 2022. As in previous months, the lowest income households expected the highest mortgage interest rates 12 months ahead (5.1%), while the highest income households expected the lowest rates (3.9%). The net percentage of households reporting a tightening (relative to those reporting an easing) in access to credit over the previous 12 months increased, as did the net percentage of those expecting a tightening over the next 12 months. The share of consumers who reported having applied for credit during the past three months, which is measured on a quarterly basis, declined to 15.0% in January from 15.9% in October. (Housing and credit access results)

The release of the Consumer Expectations Survey (CES) results for February is scheduled for 28 March 2025.

For media queries, please contact: Nicos Keranis, Tel: +49 172 758 7237

Notes

• Unless otherwise indicated, the statistics presented in this press release refer to the 2% winsorised mean. For further details, see ECB Consumer Expectations Survey – Guide to the computation of aggregate statistics.
• The CES is a monthly online survey of, currently, around 19,000 adult consumers (i.e. aged 18 or over) from 11 euro area countries: Belgium, Germany, Ireland, Greece, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland. The main aggregate results of the CES are published on the ECB’s website every month. The results are used for policy analysis and complement other data sources used by the ECB.
• Further information about the survey and the data collected is available on the CES web page. Detailed information can also be found in the following two publications: Bańkowska, K. et al., “ECB Consumer Expectations Survey: an overview and first evaluation”, Occasional Paper Series, No 287, ECB, Frankfurt am Main, December 2021; and Georgarakos, D. and Kenny, G., “Household spending and fiscal support during the COVID-19 pandemic: Insights from a new consumer survey”, Journal of Monetary Economics, Vol. 129, Supplement, July 2022, pp. S1-S14.
• The survey results do not represent the views of the ECB’s decision-making bodies or staff.