RUNAWAY inflation over the past two years has pushed public satisfaction with the Bank of England to record lows, a new study reveals today.
A net balance of just 11 per cent surveyed were satisfied with the Bank’s performance last month, down from 20 per cent in February and barely above the record low of nine per cent recorded in November 2011.
Consumer price inflation hit 5.2 per cent last September, more than double the Bank’s two per cent target, and only fell back to three per cent in April, spending more than two years above target.
But the wider economic outlook may also be to blame.
“Households may have become less satisfied with the Bank following the financial crisis and the associated weakness in demand,” the quarterly review suggests.
“Movements in net satisfaction also appear to be closely related to general economic sentiment, such as that conveyed in survey measures of consumer confidence.”
The study also found that members of the public who think quantitative easing is designed to boost demand or stop inflation falling below target are more likely to be satisfied with the Bank’s performance.
However, very few are aware of the official purpose of QE – just nine per cent thought the primary aim was to stop inflation falling below target in the future. When selecting from a list of options, 26 per cent thought the primary objective of QE is to increase confidence in the economy and 36 per cent say they did not know the aim.
“The monetary policy committee has agreed that explaining QE should continue to be an important area for the Bank’s communication strategy,” the report concluded.