31 January 2025

• Headline inflation expectations revised up for 2025 but otherwise unchanged; longer-term expectations (for 2029) remain at 2.0%
• Expectations for HICP inflation excluding energy and food unchanged for 2025 and 2026; longer-term expectations revised down slightly to 1.9%
• Real GDP growth expectations revised down by 0.2 and 0.1 percentage points for 2025 and 2026 respectively, but longer-term expectations unrevised
• Unemployment rate expectations unchanged for 2025 and 2026, but longer-term expectations revised down slightly

Respondents’ expectations for headline inflation, as measured by the Harmonised Index of Consumer Prices (HICP), were 2.1% for 2025, 1.9% for 2026 and 2.0% for 2027. Expectations were revised up from the previous survey (conducted in the fourth quarter of 2024) by 0.2 percentage points for 2025 but unchanged for 2026. Expectations for core HICP inflation, which excludes energy and food, were unchanged for 2025 and 2026. Longer-term expectations for headline inflation were unchanged at 2.0%, while those for core HICP inflation were revised down slightly to 1.9%.

Respondents expected real GDP growth of 1.0% in 2025 and 1.3% in both 2026 and 2027. Compared with the previous survey, expectations were revised down by 0.2 percentage points for 2025 and 0.1 percentage points for 2026. Economic policy and political uncertainty contributed to these revisions. Longer-term growth expectations remained unchanged at 1.3%.

The expected profile of the unemployment rate was largely unchanged. Respondents continued to expect the unemployment rate to average 6.5% in 2025 but to decline to 6.4% in 2026, and then to fall further to 6.3% in 2027 and to remain there in the longer term.