<p>The main purpose of this study is to empirically investigate the common macroeconomic driving factors of income inequality and household final consumption and to assess the existence of a long-term relationship between these variables in European countries. For this purpose, we used panel data analysis and econometric methodology for 32 European Countries in 1996–2021. In the study, income inequality and household final consumption expenditures were used as dependent variables using two separate models. A set of key macroeconomic indicators such as GDP growth rate, unemployment rates, inflation, and GDP per capita were assigned as common independent variables in the models. In the analysis, the Augmented Mean Group (AMG) panel data estimator was employed to estimate the long-run equilibrium relationship in a panel with mixed orders of integration. GDP growth rate, the unemployment rate, and GDP per capita are positively associated with income inequality. In contrast, the inflation rate does not have a statistically significant effect on income inequality. GDP growth rate and inflation are negatively associated with household final consumption expenditure. Although some studies have documented a negative relationship between GDP growth rate and household final consumption, this finding does not reflect the generally accepted view in the literature. Conversely, GDP per capita shows a positive and statistically significant relationship with household final consumption, whereas the unemployment rate has no significant effect on household final consumption.</p>