Public inflation expectations fall to 3.2 percent for year ahead
The Bank of England's August 2026 survey shows median public inflation expectations for the year ahead fell to 3.2 percent from 4.0 percent in May. Net satisfaction with the central bank returned to positive territory at 5 percent.
Lower expectations across all horizons
According to the Bank of England's quarterly survey conducted by Savanta between July 31 and August 7, 2026, UK median inflation expectations declined across all horizons.
Expectations for the coming 12 months dropped to 3.2 percent from 4.0 percent in May.
For the following year, respondents expect inflation of 2.9 percent, down from 3.5 percent.
Five-year expectations fell to 3.2 percent from 3.9 percent.
Meanwhile, the perceived current inflation rate moderated slightly to 4.9 percent from 5.0 percent.
Public net satisfaction with the Bank of England's rate-setting performance improved to positive 5 percent, up from minus 2 percent in the previous survey.
Provider switch clouds comparisons
The survey marks a methodological transition as Savanta replaced Ipsos as provider.
A parallel run conducted in May showed that while perceived inflation was identical at 5.0 percent across both pollsters, Savanta systematically recorded lower inflation expectations across one-year, two-year, and five-year horizons.
The Bank cautioned that headline declines partly reflect this provider change.
Regarding interest rates, 51 percent of respondents still expect borrowing costs to rise over the next year.
Distortions obscure the true signal
The drop in expectations brings welcome relief, but vendor distortions obscure true household sentiment.
Policymakers cannot treat these lower figures as an unvarnished disinflation success.
Until methodology stabilizes, the survey delivers noisy guidance for monetary strategy.