FX.co ★ Euro Area Inflation Expectations Rise in August

Inflation expectations among Eurozone consumers rose to 2.8% in August 2025, marking the highest level in three months, up from 2.6% in July. Projections for inflation three years forward remained steady at 2.5%, while the five-year outlook climbed to 2.2%, reaching its highest point since August 2022. Across different income levels, those in the lower income brackets consistently reported slightly higher perceptions of inflation and short-term expectations compared to higher earners, a pattern that has persisted since 2023. Nonetheless, inflation perceptions and expectations showed a relatively consistent progression across all income groups. Younger individuals (aged 18-34) continued to indicate lower inflation perceptions and expectations than their older counterparts (aged 35-54 and 55-70), though the gap has narrowed compared to previous years. Meanwhile, anticipations for economic growth over the next 12 months remained unchanged in August at -1.2%, and the forecast for the unemployment rate in the same period rose slightly to 10.7% from the previous 10.6%.