Inflation expectations rise in February - BoE poll

LONDON Fri Mar 8, 2013 11:44am GMT

A market trader packs up his stall in London November 13, 2012. REUTERS/Luke MacGregor

A market trader packs up his stall in London November 13, 2012.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - Britons expect a higher rate of inflation over the coming year than three months ago, a quarterly Bank of England survey showed on Friday.

The BoE's February inflation attitudes survey showed that average public inflation expectations for the next 12 months ticked up to 3.6 percent in February compared to 3.5 percent in the November poll. That is the highest expected rate since May.

At a two-year horizon, Britons expected inflation of 3.4 percent - also the highest since May - compared to the 3.2 percent they forecast three months ago.

In five years' time they saw inflation at 3.6 percent, unchanged from November's prediction. This rate is the highest cited since the question was first asked in February 2009.

The figures are likely to concern members of the BoE's Monetary Policy Committee, who on Thursday opted against pumping more stimulus into the fragile economy in what was probably a close-run decision.

Last month, three central bankers - including Governor Mervyn King - voted to buy a further 25 billion pounds of British government bonds.

Since then economic news has painted a picture of an economy on the verge of a third recession since 2008, but for the majority of MPC members persistently above-target inflation is likely to have been a major argument against another monetary boost.

Britain's inflation held at 2.7 percent for the fourth consecutive month in January, remaining at its highest level since May, and the central bank forecasts it will exceed its 2 percent target until 2016.

The survey was carried out for the BoE by polling company GfK NOP, which surveyed 3,896 people between February 7 and February 19.

Despite the prolonged inflation overshoot, net public satisfaction with the BoE rose to +17 from +12 in November, hitting the strongest in a year, according to the survey.

(Reporting by Olesya Dmitracova and Li-mei Hoang)

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Comments (1)
GlobalFamily21 wrote:
There is no surprise in it. If there is no production and growth then money will lead to inflation. The best example is flood. If, water flows without any control, then it will have a disastrous effect. However, if we control the flow of water by constructing Dams and Check Dams and direct the same into productive channels, then we could get great yield, electricity, transport, fish, even drinking water and much more. The question is who is going to do all these?

Clear perspective plan, financial control and discipline, proper regulatory authorities and a Brave Government for the people are necessary to uplift the great land of Shelly, Shakespeare and Wordsworth. … Miles to go before we sleep and miles to go before we sleep but should be on the right track or else we reach nowhere.

Mar 08, 2013 3:58pm GMT  --  Report as abuse
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