Inflation
The median rate of perceived inflation over the previous 12 months decreased further, for the fifth consecutive month, to 5.5%, from 6.0% in January. Median expectations for inflation over the next 12 months also decreased, to 3.1% from 3.3%. They are now at the lowest level since the start of Russia’s unjustified war against Ukraine in February 2022. Expectations for inflation three years ahead remained unchanged at 2.5%. Inflation expectations at the one-year and three-year horizons remained well below the perceived past inflation rate. Uncertainty about inflation expectations over the next 12 months remained unchanged. Developments in inflation perceptions and expectations remained relatively closely aligned across income groups, albeit somewhat higher for the two lowest income quintiles. Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (those aged 35-54 and those aged 55-70).
Income and consumption
Consumer expectations for nominal income growth increased to 1.4%, from 1.2% in January. This increase was observed across all age groups. Perceptions of nominal spending growth over the previous 12 months decreased further, for the fourth consecutive month, to 6.4%, from 6.6% in January, aligned with the developments in inflation perceptions. This decrease was solely observed in older respondents (those aged 35-54 and those aged 55-70). Expectations for nominal spending growth over the next 12 months remained stable at 3.7%.
Labour market and economic growth
Economic growth expectations for the next 12 months remained unchanged at -1.1%. Expectations for the unemployment rate 12 months ahead also remained unchanged at 10.9%. Consumers continued to expect the future unemployment rate to be slightly higher than the perceived current unemployment rate (10.5%), implying a broadly stable labour market. The lowest income quintile continued to report the highest expected and perceived unemployment rate.
Housing and credit access
Consumers expected the price of their home to increase by 2.4% over the next 12 months, which was higher than in January (2.2%). Households in the lowest income quintile continued to expect higher growth in house prices than those in the top income quintile (3.1% and 2.1%, respectively). Expectations for mortgage interest rates 12 months ahead remained unchanged from January at 5.1%. As in previous months, the lowest income households expected the highest mortgage interest rates 12 months ahead. The net percentage of households reporting a tightening (relative to those reporting an easing) in the access to credit over the previous 12 months declined, as did the net percentage of those expecting a tightening over the next 12 months, reaching levels last seen in early 2022.
