Faith in Bank of England collapses to a record low

PUBLIC satisfaction in the Bank of England’s managing of inflation has plummeted to the lowest level since records began in 1999.

The net proportion of respondents satisfied that the Bank is “doing its job to set interest rates to control inflation” collapsed to plus nine per cent in a survey conducted last month – down from plus 16 per cent in August.

“The Bank’s ‘satisfaction’ rating remains above those of the three political party leaders in the UK,” noted Citi economist Michael Saunders. “But the BoE’s poor inflation forecasting record in recent years appears to have had some cost to its external reputation.”

Respondents expect inflation of 4.1 per cent in the coming year, very slightly down on August’s surveyed level of 4.2 per cent. In 2013 respondents still predict above-target inflation of 3.4 per cent, while long term inflation expectations remain sticky, at 3.5 per cent.