Quarterly Economic Bulletin Q3 – 2026

Executive Summary

Economic activity across retail and wholesale remained uneven in the first half of 2026. Retail volumes continued to recover and moved above their 2025 levels, although they remained around 5% below their pre-COVID trajectory in June. Wholesale activity remained considerably weaker, at around 15% below its pre-COVID trajectory. At the same time, inflationary pressures increased again, reflecting renewed energy market tensions and heightened geopolitical uncertainty. The Middle East conflict added downside risks to the outlook by increasing uncertainty and contributing to higher energy and transport costs. While consumer demand has shown some resilience, the broader picture remains one of modest growth rather than a broad-based recovery. Uncertainty remains elevated, with renewed cost pressures posing risks to household purchasing power and business activity.

Economic activity

• Retail volumes continued to recover in 2026 but remained clearly below their pre-COVID trajectory.
• Wholesale volumes continue to lag behind retail activity and remain well below their pre-pandemic trajectory.
• The retail-wholesale gap points to persistent weakness and an uneven recovery across the broader economy.

Consumers and Inflation

Consumers continued to face a challenging environment in 2026. Inflationary pressures increased again as higher energy prices and geopolitical tensions weighed on purchasing power. While consumer confidence recovered from its spring low, it remained weak and households continued to prioritise affordability and value.

Headline inflation increased again in 2026, reaching 3.2% in August, with estimates pointing to a further increase in September.
Food inflation fell sharply, easing pressure on household budgets.
Higher energy prices increased upside risks to the inflation outlook.
Persistent inflationary pressures prompted the ECB to raise interest rates by 25 basis points in September. Consumer confidence fell sharply following the escalation of geopolitical tensions in spring 2026.
Sentiment subsequently recovered, but remained weak and below its pre-conflict levels.
Persistently weak confidence may continue to constrain household spending in the coming months.

Key indicators