The public believes that inflation will still be too high in late 2028, a Bank of England survey has revealed.
The Bank of England/Ipsos Inflation Attitudes Survey suggests that the public doubts the Bank’s ability to bring inflation down to the 2% target. When asked what they expect the rate of inflation to be a year from now, respondents gave a median answer of 3.3%. For three years from now, they said 2.8%.. In five years, they said it will be 3.2%.
The last figure is up from the 2.9% prediction when the survey was last conducted, in August, suggesting declining faith in the Bank’s ability to keep the rate of price rises at its target of 2%.
Respondents also overestimated the rate of inflation. Asked to give the current rate of inflation, respondents gave a median answer of 7.5%. Inflation was 6.7% in September, the last published figures before the survey was conducted, and fell to 4.6% in October.
Respondents’ satisfaction with the Bank of England was improved, after hitting record lows earlier this year. The Bank’s net satisfaction rating was -14%, up from -21% in August.
But the public still thought the Bank has raised interest rates too high. When asked what would be “best for the economy”, 11% thought rates should ‘go up’, 40% of respondents thought that interest rates should ‘go down’, and 29% thought interest rates should ‘stay where they are’.
The Bank raised interest rates to a 15-year high of 5.25% earlier this year, after 14 consecutive rate hikes. However, it held interest rates where they are at each of its last two meetings. It is widely expected to hold rates again when it meets on 14 December.
