–Replaces Item Transmitted in Error At 0930 GMT

LONDON (MNI) – Inflation expectations eased a little in November,
as headline inflation dipped and the economic outlook deteriorated, but
they were still more than two percentage points above target and public
dissatisfaction with the Bank of England is growing.

The November Bank of England/GfK NOP survey found year ahead
inflation expectations fell to 4.1% from 4.2% in August. This was up
from 3.9% a year ago but below the 4.4% peak seen back in August 2008.
The central bank forecasts inflation will still to fall sharply next
year, back towards the 2.0% target, but the public is more skeptical.

Two year ahead inflation expectations dipped to 3.4% from 3.5% in
August while longer term inflation expectations were unchanged at 3.5%.

The survey shows the public is becoming increasingly dissatisfied
with the Bank of England, at a time when elevated inflation and low wage
growth have seen living standards squeezed.

A net 9% of respondents said they were satisfied with the job the
Bank of England is doing to set interest rates to control inflation.
This was the lowest reading since the series began back in November
1999 and down from a net 16% in August.

When asked what the current rate of inflation was, respondents
gave a median answer of 5.0% – in line with the official data.

Some BOE Monetary Policy Committee members have repeatedly
expressed concerns about risk of elevated inflation feeding through into
higher inflation expectations and this survey shows the public is yet to
be convinced that price growth will decelerate sharply next year.

Two recent private sector inflation expectations surveys came up
with contrasting results.

The Barclays Q4 BASIX survey found year ahead inflation
expectations were flat at 4.2%, pretty much in line with the BOE’s
survey, but a November Citi/YouGov survey showed them falling.

The survey was conducted between Nov 3 and 8, covering 1,853
people.

–London newsroom: 4420 7862 7491; email: drobinson@marketnews.com

[TOPICS: M$B$$$,M$$BE$,MABDS$]