The British public’s expectations for inflation over the medium term rose to their highest in more than two years, and Britons also expect a faster pace of interest rate rises, a Bank of England survey showed on Friday.
The poll showed that expectations for inflation over the next two years rose to 2.9 per cent from 2.7 per cent, while for five years ahead expectations rose to 3.5 per cent.
Last month the BoE raised its key interest rate for the first time in more than a decade and said further, very gradual, rate increases were likely over the next couple of years.
Now 63 per cent of the public expect interest rates to increase over the coming year, up from 42 per cent at the time of the last BoE survey in August.
Consumer price inflation held at a five-year high of 3.0 per cent in October and the BoE forecasts it will only fall slowly.
A similar survey by polling company YouGov for Citi showed last week that Britons’ inflation expectations for the year to come had fallen to 2.6 per cent in November.
Expectations for inflation over the next five to 10 years held at 3.2 per cent, its joint-highest level since 2014.
The BoE survey was based on polling of 2,097 people between 3 November and 7 November and was conducted by market research company TNS.