Brits losing faith in inflation strategy
The Bank of England’s latest inflation attitudes survey suggests that fewer people believe inflation is being controlled effectively with interest rates.
In August, when the survey was last carried out, the proportion satisfied that the Bank was doing its job to set interest rates to control inflation, versus those dissatisfied, was 16 per cent, but this figure fell to just 9 per cent in the November survey.
The represents the lowest level of satisfaction since the survey started in November 1999.
Consumers who participated in the November survey said they expected prices to rise by 4.1 per cent over the next year.
They expect an inflation rate of 4.1 per cent over the same period, a slight fall from expectations of 4.2 per cent inflation recorded in the August survey.
Those surveyed said they expected inflation to be a median of 3.4 per cent in 2013, increasing slightly to 3.5 per cent in five years’ time.
The proportion of those surveyed who expect interest rates to fall over the next year fell to six per cent in the November survey, compared with 7 per cent in August, while 39 per cent said they expected interest rates to increase, compared with 38 per cent in August.
Although inflation fell to 4.8 per cent last month, the survey showed that people perceive it to be 5 per cent.
The results are based on a survey carried out by GfK NOP on behalf of the Bank of England, of 1,853 people in the UK aged 16 and over between November 3 and 8.
Meanwhile, in the eurozone inflation reached 3 per cent in November, the third consecutive month it has hit this level.
The eurozone economy is expected to have contracted by 0.6 per cent in the final three months of 2011.
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