London, September 13 – British households’ short-term inflation expectations eased in August, according to the latest quarterly survey conducted by Ipsos for the Bank of England, as reported by DPA.
In the next 12 months, households expect inflation to reach 2.7%, slightly down from the 2.8% prediction made in May. While this represents a modest improvement, long-term expectations have worsened slightly. Over the next five years, inflation is now expected to reach 3.2%, up from the previous forecast of 3.1%.
| Time Period | Previous Inflation Expectation | Current Inflation Expectation |
|---|---|---|
| Next 12 months | 2.8% | 2.7% |
| Next 5 years | 3.1% | 3.2% |
Interest Rate Expectations
At the same time, there has been a decline in the number of Britons who expect interest rates to rise in the next year. According to the survey, 29% of respondents believe interest rates will increase in the next 12 months, down from 34% in May. Conversely, 22% of respondents expect interest rates to remain stable, compared to 25% in May.
| Interest Rate Expectation | May 2023 | August 2023 |
|---|---|---|
| Expect rate increase | 34% | 29% |
| Expect rates to remain stable | 25% | 22% |
Survey Details
The survey was conducted from August 2 to August 6, and the findings reflect changing attitudes toward inflation and interest rate movements, as British households continue to navigate an uncertain economic landscape.
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