ECB Consumer Expectations Survey Results – February 2026

Why It Matters

The modest decline in inflation expectations reinforces the European Central Bank’s confidence that price pressures are moving toward its 2% target, while the brighter growth and labour outlook may reduce the urgency for further rate hikes.

Key Takeaways

• Inflation expectations fell to 2.5% for next year
• Nominal income growth outlook steady at 1.2%
• Unemployment expectations dropped to 10.8%
• Home‑price growth expectations slipped to 3.6%
• Credit‑tightening sentiment eased among households

Pulse Analysis

The February CES indicates that euro‑area households are beginning to see inflation receding, with the median 12‑month expectation now at 2.5% and the five‑year view unchanged at 2.3%. This convergence across income brackets suggests that recent geopolitical shocks, such as the Middle‑East conflict, have not yet altered the underlying price outlook. For the ECB, the data provide a reassuring signal that its monetary‑policy tightening is taking effect and that inflation may settle near the 2% target.

Consumer confidence in earnings remains muted, as nominal income growth expectations stayed at 1.2%, yet spending optimism nudged higher to 3.5% for the coming year. The slight improvement in growth expectations (‑0.9% versus ‑1.1% in January) and the dip in unemployment forecasts to 10.8% reflect a cautiously optimistic labour market. These trends could temper the central bank’s incentive to maintain restrictive rates, especially if real wage pressures stay low.

On the housing front, households now anticipate a 3.6% rise in home prices and unchanged mortgage‑rate expectations at 4.7%, while the net perception of credit tightening has eased. The softer outlook on credit constraints may encourage borrowing and support consumption, but persistent mortgage‑rate expectations could limit the upside for housing demand. Policymakers will likely monitor these dynamics closely as they balance inflation containment with the need to sustain a fragile economic recovery.