Consumers expect more inflation. But hardly more income
According to an ECB survey, people in the euro area expect 3.0% inflation next year, while their income is expected to grow by only 1.0%.
By Finmon
Prices & inflation · Euro area · 2026-09-18 · 3 min · European Central Bank (ECB)
This explainer may be out of date (valid until 2026-10-23). Check the source before acting on it.
3.0% expected inflation, next 12 months
In 30 seconds
- Surveyed households expect 3.0% inflation over the next twelve months, up from 2.9% in July.
- For their own income they expect only a 1.0% rise, in real terms that would mean losing purchasing power.
- For you, that means checking whether your savings and your pay keep up with rising prices.
What does this mean for you?
I save (Likely downside)
If the rate on your savings or current account is below inflation, your money loses value in real terms. With 3% expected inflation, 1% interest is not enough to preserve purchasing power.
I am employed (Likely downside)
If your salary rises more slowly than prices, you are left with less in real terms at the end of the month. The survey points to exactly this concern. Current inflation is a factual argument in pay discussions.
I have loans (Mixed)
With a fixed rate, you repay in money that is losing value, in real terms the loan gets lighter. With a variable rate, or if you need to refinance soon, higher inflation can instead mean higher interest.
I am retired (Likely downside)
Fixed incomes such as pensions are usually adjusted only once a year. If prices rise in between, the room in your budget shrinks.
How it could hurt you
Silent loss of purchasing power
Money that earns hardly any interest loses real value year after year at 3% inflation. It goes unnoticed because the balance stays the same.
More expensive refinancing
If your fixed-rate period ends soon, persistent inflation expectations can help keep loan rates high for longer.
Where there may be an upside
Compare rates for short-term money
For money you do not need every day, banks pay very different rates. Comparing can narrow the gap to inflation.
Only if Pay attention to statutory deposit protection of up to 100,000 euros per bank and person, to terms on fixed deposits, and to teaser rates that often apply only for a limited time. Your emergency fund should stay accessible at all times.
What happened?
- On 18 September 2026 the ECB published its monthly consumer survey of around 19,000 adults in eleven euro area countries, including Germany.
- Perceived inflation over the past twelve months was 3.5% in August, unchanged from July.
- Respondents expect 3.0% inflation over the next twelve months (July: 2.9%) and 2.9% three years ahead (July: 2.7%).
- Expected income growth stayed at 1.0%. Respondents expect mortgage rates of 4.9% in twelve months' time.
Why does it matter?
The ECB watches inflation expectations closely: when many people expect prices to rise, they are more likely to ask for higher wages and companies are more likely to raise prices, which can entrench inflation. That feeds into future interest rate decisions. Keep in mind that the survey measures expectations, not actual prices. The striking point for everyday life is the gap: people expect prices to rise much faster than their income.
What 10,000 euros are worth after one year
Worked example
You hold 10,000 euros at 1% interest. After one year your account shows 10,100 euros. If prices rise by 3%, that buys only as much as about 9,806 euros would today, roughly 194 euros less.
Assumptions: Simplified: one year, 1% interest, 3% inflation, no taxes. Actual inflation can differ from expectations.
What you could check now
- Check what interest your savings account actually pays right now.
- Compare how your pay has developed over the last two years with inflation.
- If your fixed-rate period ends within the next two years, note the date.
No action needed if: Your emergency fund is accessible, your savings are deliberately invested and your loan has a long fixed rate. A survey alone is no reason to change anything.
What is still uncertain
- Expectations are not a forecast: actual inflation can turn out higher or lower.
- According to the ECB, respondents' uncertainty remains higher than before the conflict in the Middle East.
- The next survey will be published on 23 October 2026.
Sources & checks
- ECB Consumer Expectations Survey results, August 2026
European Central Bank (ECB) · 2026-09-18
This explainer was created with AI assistance from the original source and checked automatically: figures against the source text, identical statements in German and English, official sources only, no buy or sell recommendations.
Published 2026-09-29 · Revision 1 · Valid until 2026-10-23
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