Average public expectations of the rate of inflation over the coming year were recorded at 3%, down from 3.3% in November 2023, according to The Bank of England’s quarterly survey of public attitudes to inflation.
By a margin of 69% to 5%, survey respondents believed that the economy would end up weaker, rather than stronger, if prices started to rise faster, compared to 69% and 6% respectively in November 2023.
40% of respondents thought the inflation target was ‘about right’, down from 41%.
The proportion that stated the target was ‘too high’ or ‘too low’ were 31% and 11% respectively.
69% of respondents said that interest rates on things such as mortgages, bank loans and savings had risen over the past 12 months, meanwhile, 6% of respondents thought that interest rates had fallen last year.
Newspage asked experts for their thoughts, below.
Reaction:
Dariusz Karpowicz, director at Albion Financial Advice:
“This survey reveals a clear message: people are feeling the financial pinch, with higher interest rates tightening the screws on those with mortgages, loans and credit card debt.
“While there’s a recognition that rate hikes were necessary to tackle inflation, a growing number of people now anticipate and indeed hope for a downward adjustment.
“Public perception has shifted, expecting inflation to cool and interest rates to stabilise or decrease, reflecting a cautious optimism about the future.
“Satisfaction with the Bank’s handling of rates is improving, indicating a nuanced understanding among the public about the balance between controlling inflation and supporting economic growth.”
Riz Malik, director at R3 Mortgages:
“The Bank of England had to call in the Americans to mark their homework in the form of former Fed Chair, Ben Bernanke, whose investigation should be out in April.
“That tells you all you need to know about the inadequacy of our central bank.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“People thinking rates should go up are clearly those with no mortgage or debt and savings in the bank.
“It would be far better if the Bank of England sought the opinions of businesses, employers and economists, all of whom would rate the performance of the Bank of England as catastrophic.”
Justin Moy, managing director at EHF Mortgages:
“A huge proportion of the UK public have become better at understanding our economy, specifically how inflation directly influences mortgage rates and affects their finances.
“With mortgage borrowers approximately 30% of the UK population, it’s not [surprising] that a similar percentage want to see rates fall, whereas a large number of the public with savings would actually benefit from higher rates.
“Further assessments in the coming months will be an important barometer, especially with a General Election not far away.”
Gary Bush, financial adviser at MortgageShop.com:
“The Bank of England surveying the public should surely show them that the attitude of the general public is that the rich boys in control are driving them over the cliff edge.
“It’s great that the Bank of England uses the word satisfaction in their responses, but do they truly know the meaning of the word? Where is the value in the current system that the general public is asking/praying for?
“Let’s hope that, at the next Monetary Policy Committee meeting on 21st March, all committee members have received, read, AND absorbed this data and act on it before putting another nail in the country’s coffin.”
Ben Perks, managing director at Orchard Financial Advisers:
“Unlike the Chancellor, who said we’d be at 2% inflation in two months, the public seem much more realistic in their attitude towards the end of this inflation nightmare. In short, they feel it will take longer.
“The disparity between people who want rate rises and reductions is interesting, very likely borrowers versus savers.
“In the mortgage world, we are very keen to see reductions, as the burden on borrowers is insurmountable and needs to be alleviated soon.
“The Bank of England should be feeling the pressure to reduce, another hold isn’t good enough for borrowers. In fact, it could be too late.”
Charles Breen, founder at Montgomery Financial:
“The Bank of England is seen as impotent by a sizeable percentage of the general public.
“The average person now can see the emperor has no clothes, with the Bank of England almost always behind the curve.
“It’s only a matter of time before Andrew Bailey’s resignation is demanded.”
