Respondents’ expectations for headline inflation, as measured by the Harmonised Index of Consumer Prices (HICP), stood at 3.0% for 2026, 2.6% for 2027 and 2.0% for 2028. Compared with the previous round, these were revised up by 0.3 and 0.4 percentage points for 2026 and 2027 respectively but remained unchanged for 2028. Longer-term expectations (for 2031) remained at 2.0% for both headline and core inflation. A special question, which was also asked in the previous round, concerned the impact of the war in the Middle East. The responses suggested that additional effects of the energy price shock are mainly expected for 2027 but that second-round effects will remain limited. For inflation, the risk balance was tilted to the upside for 2026-28 but remained more balanced thereafter.
Respondents expected real GDP growth of 1.0% in 2026 and 1.3% in both 2027 and 2028. Expectations were revised up by 0.4 percentage points for 2026 and by 0.1 percentage points for 2027 compared with the previous survey and were unchanged for 2028. Longer-term growth expectations (for 2031) were revised up by 0.1 percentage points to 1.3%. For real GDP growth, the balance of risks was tilted somewhat to the downside for all horizons.
Unemployment rate expectations were slightly higher for 2026 at 6.4%, before declining gradually to 6.1% in the longer term.
