The European Central Bank (ECB) released its Consumer Expectations Survey (CES) for February 2026, revealing a mixed outlook among consumers just before the escalation of the Middle East conflict. Notably, inflation expectations for the next 12 months and three years slightly decreased to 2.5%, while perceptions of inflation over the past year remained stable at 3.0%. Consumers also reported unchanged expectations for nominal income growth at 1.2%, but anticipated a slight increase in spending growth to 3.5%.

These findings are significant as they indicate a tempered outlook on inflation and economic growth, which could influence ECB monetary policy decisions moving forward. The shift in consumer sentiment, particularly the less negative economic growth expectations, suggests a potential stabilization in consumer spending, which is crucial for economic recovery.

Market professionals should monitor how these consumer expectations may impact sectors sensitive to spending and inflation, especially in retail and housing, as well as the broader implications for interest rates and monetary policy in the Eurozone.

Source: ecb.europa.eu