By David Barwick – FRANKFURT (Econostream) – Eurozone consumers’ near-term inflation expectations remained elevated in April, while their assessment of recent inflation rose significantly, the European Central Bank said Monday.

The ECB’s Consumer Expectations Survey showed median inflation expectations for the next 12 months unchanged at 4.0%, while perceived inflation over the previous 12 months increased to 4.0% from 3.5% in March.

Inflation expectations three years ahead edged down to 2.9% from 3.0%, while expectations five years ahead were unchanged at 2.4%, the ECB said.

Uncertainty about inflation expectations over the next 12 months remained “at an elevated level,” according to the survey.

The results are likely to be closely watched by the Governing Council ahead of its June 11 monetary policy meeting, given the ECB’s concern that the latest energy shock could feed into broader inflation dynamics if expectations drift further.

The survey also pointed to pressure on household purchasing power. Consumers’ expectations for nominal income growth over the next 12 months fell to 0.8% from 1.2%, while expected nominal spending growth increased to 4.3% from 4.1%.

Perceived spending growth over the previous 12 months increased to 5.3% from 5.1%, the ECB said.

Consumers’ expectations for economic growth over the next 12 months became slightly more negative, falling to -2.2% from -2.1%.

The expected unemployment rate 12 months ahead declined to 11.2% from 11.3%, while consumers continued to expect the future unemployment rate to be slightly above the perceived current rate of 10.5%.

Quarterly data showed a mixed labor market picture, with unemployed respondents reporting a higher expected probability of finding a job over the next three months, while employed respondents reported a higher expected probability of job loss.

Housing expectations were broadly unchanged. Consumers expected home prices to rise 3.7% over the next 12 months, the same as in March, while expected mortgage rates were also unchanged at 4.9%.

The net share of households reporting tighter access to credit over the previous 12 months rose to its highest level since February 2024, the ECB said.

The net share expecting tighter credit conditions over the next 12 months also increased, reaching its highest level since October 2023.

The survey fieldwork was carried out between April 2 and May 4. The May survey results are scheduled for release on June 26.