Perceived inflation over the past 12 months rose to 3.6%. Expectations for inflation three and five years ahead were unchanged, at 2.9% and 2.5%. Consumers expect nominal income to grow by 1.1%, well below their expected spending growth. Perceived spending growth over the past year was 5.3%.

Expectations for the economy are weaker. Consumers expect growth of -1.5% and an unemployment rate of 11.3% in a year, against a perceived current rate of 10.6%. Households in the lowest income quintile report the highest inflation perceptions and expectations. The survey covers about 19,000 adults in 11 euro area countries, with fieldwork between 27 August and 28 September. The next results are due on 27 November.

Expected spending growth of 3.7% is only slightly above expected inflation of 3.1%. Most of the extra spending households plan is therefore likely to go on higher prices rather than more goods.

#AffordableRetail #RetailResilience