UK inflation expectations at 2008 levels

UK INFLATION expectations have risen to their highest level in two years, according to the Bank of England.

Its quarterly inflation expectations report showed public expectation of inflation rose to
3.4 per cent last month compared to 3.3 per cent when the last survey was carried out in

Less people in August believed interest rates should increase with only 20 per cent of people suggesting a rise in interest rates would be appropriate compared to 25 per cent in May.

Meanwhile, 54 per cent of people thought the inflation target was “about right”, compared with 56 per cent in May. Yet figures on Wednesday showed the Consumer Price Index remained above three per cent for the sixth consecutive month while inflation had remained above the Bank’s two per cent target for almost a year. David Miles, a member of the Bank of England’s Monetary Policy Committee also warned UK inflation was uncomfortably high.

“I am particularly concerned about inflationary pressures, since it is our job to keep the rate close to the two per cent target and it is uncomfortably above that at present,” he added.