The majority of the British public expect prices to keep rising and are largely pessimistic about the UK’s economic outlook according to a recent Bank of England poll
Seventy-six percent of people believe prices have risen over the last 12 months while the same percentage believe prices will continue to rise next year. Sixty-two percent of people believe they will rise again the year after that.
The poll on public perceptions and experiences of inflation was carried out by the Bank of England and revealed a public largely sceptical of the British economy’s ability to grow healthily and in a way that improves living standards and keeps the price of living within an affordable bracket.
To counter a rise in the cost of living more people still spend rather than save: 43% said they would shop around for better deals in the face of rising prices while only 34% said they would spend less and save more.
In terms of inflation there was a broad expectation that it would slowly rise. The median of respondents saw inflation rising from 2.4% to 2.9%. While in the longer term, within five years’ time, they saw inflation reaching 3.6%. Forty-nine percent of those polled believed the Bank of England’s 2% inflation target was “about right”.
In terms of how the interest rates set by the Bank impact people personally there was a slim majority of 28% saying they would rather they went down as opposed to 22% who would rather see a rise.
Other notable statistics included:
- 51% of people believe the UK’s rising prices will mean Britain’s economy will get weaker.
- 51% was also the proportion who believed interest rates would rise.
- 38% of people believed rates on loans and mortgages had risen, compared to just 7% saying they had fallen.
- The Bank of England claimed an overall satisfaction rate of 25%, down 5% from 30% in February. Two thirds of people knew the Bank of England set rates but 57% did not know who the group of people that meets to decide this were (The Monetary Policy Committee).
The Monetary Policy Committee next meet on June 21st and publish their next inflation report on August 2nd.