The European Central Bank’s approach to monetary policy increasingly relies on direct measurement of household expectations, ECB Vice-President Boris Vujčić said in a speech on Tuesday. Speaking at the inauguration of an Alexander von Humboldt Professorship at ESMT Berlin, Vujčić emphasized that households form inflation and economic outlooks differently from professional forecasters, with beliefs shaped by income, wealth, housing tenure, financial literacy and exposure to salient prices such as food and fuel.
The ECB’s Consumer Expectations Survey, launched in 2020, provides population-representative, high-frequency data on household inflation perceptions, income expectations, spending intentions and uncertainty, Vujčić noted. This survey complements traditional macroeconomic indicators by capturing how households interpret shocks, update beliefs and adjust behavior—dimensions that aggregate price and output data alone cannot reveal. Research co-authored by Michael Weber, the newly appointed Humboldt Professor, has shown that perceptions of food and energy price increases disproportionately influence inflation expectations, while differences in information environments contribute to persistent gender gaps in reported inflation outlooks.
Expectations data have become central to ECB policy analysis during a period of elevated geopolitical risk and volatile energy prices, Vujčić said. The June 2026 Eurosystem staff projections highlighted the need to communicate not only a baseline scenario but also uncertainty and alternative paths. Survey evidence helps calibrate such scenarios by revealing how households perceive the persistence of shocks, whether they expect temporary price spikes to fade or to embed into longer-term inflation narratives, and how these perceptions translate into postponed spending or precautionary saving.
The Vice-President also underscored the role of uncertainty in shaping demand. Evidence from the Consumer Expectations Survey indicates that elevated perceived macroeconomic uncertainty can depress household spending for extended periods, complicating the assessment of whether weaker demand reflects temporary caution or structural weakness. Transmission of monetary policy also varies across households depending on mortgage structures, housing tenure and financial participation, with survey data showing long and uneven lags between interest rate resets and consumption responses across countries and demographic groups.
Vujčić noted that household inflation expectations are generally less anchored than those of professional forecasters, though longer-term household expectations tend to cluster around the ECB’s 2% target and show less sensitivity to short-term surprises. This distinction helps policymakers distinguish between temporary inflation episodes and deeper credibility risks. The survey data are used alongside other ECB tools, including the Survey on the Access to Finance of Enterprises and the Bank Lending Survey, to triangulate household beliefs, firm conditions and credit supply dynamics in real time.
The speech concluded by positioning household expectations measurement as a complement—not a replacement—to traditional macroeconomic and market data. By quantifying perceptions, uncertainty and intended behavior, the ECB gains a more granular view of how policy transmits through the real economy, particularly in periods of heightened geopolitical stress and energy market volatility.
