Rate of inflation is not as bad as you think but survey shows consumers are feeling the pinch

 
Billy Ehrenberg
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Governer of the Bank of England Mark Carney (Source: Getty)

The Bank of England has released the results of its latest survey into what consumers believe the rate of inflation will be over the next 12 months.

The figure was up 0.2 percentage points to 2.8 per cent, while respondents believed the current rate to be around 3.4 per cent.

Were the true figure to be hovering around three, there would be a better than even chance that interest rates would have been hiked off the baseline yesterday.

The latter figure seems to be out of step with the latest inflation figures, which showed CPI to have risen only 1.6 per cent in the 12 months to the end of July.

The higher figure from the 2016 people survey randomly selected areas perhaps shows the squeeze the public is feeling from the cost of living crisis.

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