Inflation
In January the median rate of perceived inflation over the previous 12 months decreased to 3.0%, from 3.2% in the previous month. Median expectations for inflation over the next 12 months also declined by 0.2 percentage points to 2.6% in January from 2.8% in December. Expectations for inflation three years ahead were unchanged at 2.6%, while inflation expectations for five years ahead decreased to 2.3%, from 2.4%. Uncertainty about inflation expectations over the next 12 months remained unchanged in January. Respondents in lower income quintiles continued to report on average slightly higher inflation perceptions and short-horizon expectations than those in higher income quintiles, a trend observed since 2023. However, the broad evolution of inflation perceptions and expectations remained closely aligned across income groups. Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (aged 35-54 and 55-70).
Inflation results
Income and consumption
Consumers’ nominal income growth expectations over the next 12 months increased to 1.2% in January, from 1.1% in December. This increase was driven by the highest three income quintiles. Meanwhile, perceived nominal spending growth over the previous 12 months was unchanged from December, at 4.9%. Expected nominal spending growth over the next 12 months also remained unchanged at 3.4% in January.
Income and consumption results
Economic growth and labour market
Economic growth expectations for the next 12 months remained unchanged at -1.1% in January. Similarly, expectations for the unemployment rate 12 months ahead remained unchanged at 11.0%. As observed in previous months, lower-income households expected the highest unemployment rate 12 months ahead (13.5%), while higher-income households expected the lowest rate (9.5%). Consumers continued to expect the future unemployment rate to be slightly higher than the perceived current unemployment rate (10.6%), suggesting a broadly stable labour market outlook. Quarterly data revealed a positive change in labour market sentiment. Unemployed respondents reported an increased expected probability of finding a job over the next three months, rising from 24.5% in October to 30.1% in January. Employed respondents reported a decreased expected probability of job loss over the next three months, declining to 8.2% in January, from 8.5% in October.
Economic growth and labour market results
