Inflation to remain high for five years, say Britons
- The British expect inflation to be 3.2% for an extended period
- Inflation slowed to 4.6% in October, below market expectations of 4.8%
Britons do not think the Bank of England can achieve its 2 percent inflation target within the next five years, a survey has found.
Research from the Bank yesterday showed that consumers said last month that prices will still rise too quickly in 2028.
The survey showed that on average, British people expected inflation to be 3.2 percent 'in the longer term' – or over five years.
Struggle: The survey found that, on average, Britons expected inflation to be 3.2 percent 'in the longer term' – or five years from now
In August, consumers predicted the rate would drop to 2.9 percent within five years.
The results suggested that Britain does not think the central bank is doing enough to bring inflation back to its 2 percent target.
Inflation slowed to 4.6 percent in October, below market expectations of 4.8 percent and down from 6.7 percent in September and August.
Consumers said they were unhappy with the way the bank sets interest rates to control rising prices.
Net satisfaction was a negative 14 percent, although that was an improvement on the negative 21 percent recorded in August.
The Bank raised interest rates to a 15-year high of 5.25 percent, but halted rate hikes earlier this year after 14 consecutive hikes.
In response to the survey, 44 percent of consumers said interest rates would rise again in the next 12 months, up from 63 percent in August. Meanwhile, 29 percent said they expected borrowing costs to remain stable in the coming year, up from 19 percent in August.
The bank is expected to maintain interest rates for the third time in a row next week.
But traders are counting on three cuts – of 15 basis points each – from the bank's Monetary Policy Committee by the end of next year.