Eurozone Consumers See Inflation Easing, But Credit and Housing Costs Rising
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Institutions: Ministry of Finance
The European Central Bank (ECB) released the results of its Consumer Expectations Survey (CES) for September 2025, which provides key insights into how households perceive the economy, inflation, and lending conditions. The data shows a mixed picture: short-term inflation concerns are easing, but consumer confidence regarding future spending and credit access is tightening.
In terms of inflation, the perceived rate over the past year remained unchanged at 3.1% for the eighth consecutive month. Crucially, consumer expectations for inflation over the next 12 months decreased slightly to 2.7%, while longer-term expectations (3 and 5 years ahead) remained stable at 2.5% and 2.2% respectively. This suggests that households believe the central bank’s actions are helping to gradually cool the rise in prices.
However, the survey highlights growing financial strain. Although expected nominal income growth remained stable at 1.1%, expectations for mortgage interest rates over the next 12 months increased to 4.6%. Furthermore, the net percentage of households anticipating tighter access to credit over the next year rose for the third month in a row, indicating that the impact of high interest rates is increasingly being felt by families seeking loans. The outlook for the labor market and general economic growth remained broadly stable but weak, with growth expectations still negative at -1.2%.
The survey results suggest that the ECB’s tight monetary policy is effectively transmitting to the credit market, driving up borrowing costs and cooling inflation expectations. However, the rise in credit-tightening expectations and house price growth means the central bank must carefully balance its policy, ensuring it tames inflation without causing undue harm to the broader economy and credit availability for consumers.
What is the ECB’s Consumer Expectations Survey (CES)?→ The CES is a monthly, micro-level survey of approximately 19,000 consumers across 11 euro area countries. Its purpose is to gather detailed data on how households perceive and anticipate economic variables like inflation, income, job prospects, and housing costs. This information is crucial for the ECB’s decision-making bodies, as it provides a direct measure of consumer confidence and expectations, which are vital components of economic and monetary policy transmission.
Follow the full update here: ECB Consumer Expectations Survey results – September 2025