UK public inflation expectations rise, BoE satisfaction falls
The Bank of England's latest quarterly Inflation Attitudes Survey reveals a notable increase in public expectations for inflation over the coming year. Concurrently, public satisfaction with the Bank's performance in controlling inflation has declined.
Inflation outlook darkens for households
The latest Bank of England (BoE)/Ipsos survey indicates a worsening public outlook on inflation.
Respondents' median estimate for the current rate of inflation rose to 5 percent, up from 4.6 percent in February 2026.
Looking ahead, expectations for inflation over the next twelve months increased significantly to a median of 4 percent, compared to 3.2 percent in the previous survey.
Longer-term inflation expectations also saw an uptick, with the median forecast for the twelve months after the coming year reaching 3.5 percent, up from 3.2 percent.
Even in the five-year horizon, expected inflation climbed to 3.9 percent from 3.7 percent.
This suggests a broad-based increase in perceived and anticipated price pressures among the UK public.
A substantial majority of 78 percent of respondents believed that the economy would weaken if prices started to rise faster, an increase from 72 percent in February.
Despite these concerns, the proportion of respondents who thought the inflation target was 'about right' remained stable at 39 percent, with 32 percent deeming it 'too high' and 12 percent 'too low'.
Interest rate perceptions shift
Public perceptions regarding interest rates have shifted considerably.
Nearly half of respondents (49 percent, up from 32 percent) reported that interest rates on mortgages, bank loans, and savings had risen over the past 12 months.
Conversely, those believing rates had fallen decreased from 35 percent to 18 percent.
Looking forward, a majority of 53 percent now expect rates to rise over the next 12 months, a sharp increase from 30 percent previously.
Only 11 percent anticipate a decline.
When asked what would be 'best for the economy', 38 percent favored lower rates, while 12 percent preferred higher rates.
For personal finances, 34 percent desired lower rates, and 23 percent higher rates.
BoE's communication challenge
The survey results paint a challenging picture for the Bank of England, indicating that its communication efforts on inflation control are not fully resonating with the public.
Persistently high inflation expectations risk becoming entrenched, complicating future monetary policy decisions.
This divergence between official targets and public sentiment underscores the difficulty in anchoring expectations during periods of economic volatility.