Household expectations can materially shape spending, saving, borrowing and wage demands, making them an important part of monetary-policy transmission, European Central Bank Vice-President Boris Vujčić said in a speech in Berlin.
Vujčić said surveys complement aggregate, administrative and market data by capturing perceptions, uncertainty and intended behavior that cannot be directly observed through other sources. He pointed to the ECB’s Consumer Expectations Survey as a tool for tracking beliefs across countries and over time.
Household Expectations Inform Analysis of Economic Shocks
He said survey evidence can help policymakers interpret geopolitical and energy-price shocks by showing whether households view them as temporary or persistent, and whether they respond by delaying spending and increasing precautionary saving. Higher perceived macroeconomic uncertainty can persistently reduce household spending, he added.
Vujčić also said monetary tightening has uneven effects across households, reflecting differences in housing tenure, stock-market participation, mortgage contracts and the timing of interest-rate resets. Consumer survey analysis can help assess these differing balance-sheet channels and their aggregate implications.
On communication, Vujčić said clear explanations of the inflation target and policy objective may be more effective for broad audiences than technical discussion of instruments. Communication is part of policy transmission because it can influence inflation expectations, though credibility ultimately depends on central-bank performance, competence, consistency, transparency and accountability.
