–BOE/GfK NOP Nov Survey Shows Yr Ahead Inflation Expectations At 3.0%
–Public Estimates Of Current Inflation 3.2% Vs 2.8% In Aug
–BOE: MPC Saw Inflation Attitudes Data At Dec Policy Meeting
LONDON (MNI) – A Bank of England survey published Thursday found
the public believed inflation was running at record high levels, and was
set to remain way above the 2.0% target set for the BOE.
The November survey found public inflation expectations rose to
3.0% in November, up from 2.7% in August and their highest level since
the series began in November 1999. The public put the current inflation
rate at 3.2%, another series high, up from 2.8% in the August survey.
Members of the BOE Monetary Policy Committee have repeatedly cited
inflation expectations as an upside risk, expressing disappointment that
they have not fallen back despite headline CPI dropping back from its
3.1% peak in March.
The data will reignite the debate over why the BOE’s Monetary
Policy Committee sanctioned a rate cut in December when inflation
expectations were running so far above target. A BOE spokesperson
confirmed the MPC had seen the data at the time of the December meeting.
The survey showed the subsequent December rate cut would have come
as a surprise to most of the populace. In all, 52% said they expected
interest rates to rise in the next 12 months and only 15% expected them
to fall.
Only 9%, however, thought interest rates should go up, down from
12% in August, and 39%, a series high, thought they should be lowered.
The public’s faith in the BOE also appears to be slipping. The
survey found a net 31% were satisfied the central was “doing its job to
control inflation”, down from 32% in August and the lowest outturn since
May 2000.
The survey was conducted between Nov 15 and Nov 20 and covered
2,054 people.
–London newsroom: 4420 7634 1623; email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]
