Public confidence in the Bank of England’s ability to bring inflation back under control plunged to a new low today, according to the Bank’s quarterly public survey.
The Bank’s net satisfaction rate, when members of the public were asked whether it was ‘doing its job to set interest rates to control inflation’, was minus 21%. That is down from minus 13% in May 2023, and easily the lowest rate since records began in 1999, soon after the Bank became independent.
Net satisfaction rates had been positive, at between 20-30%, for most of the decade up to 2022, until inflation began to surge.
When respondents were asked what would be “best for the economy”, the largest cohort, at 40%, said that interest rates should go down. Only 13% said they should go up, despite the fact that the Bank is widely expected to raise rates further, to 5.5% or higher, before it will think about bringing them down again. 26% thought interest rates should “stay where they are”.
There were signs of positivity, though, in the public’s perceptions of inflation. When asked to give the current rate of inflation, the median response was 8.6%, which is higher than the actual rate of inflation, but down from May’s median response of 9.6%.
Looking a year ahead, respondents expected inflation to be close to the Bank’s target, at 2.8%. However this is up slightly from the May survey, when year-out inflation was expected to be 2.6%.
The Bank’s Monetary Policy Committee is set to announce its next interest rates decision on Thursday. Markets expect a quarter-point hike to 5.5%, the 15th rate increase in a row, but a pause cannot be ruled out.
