THE LATEST Bank of England quarterly inflation survey shows that more than a quarter of Britons think the rate of inflation is above four per cent, suggesting that people are increasingly feeling the pinch of a weak pound.
In the Bank of England’s survey of 4,254 people, the median response for the current rate of inflation was 3.1 per cent, up from 2.9 per cent in November.
The official rate of inflation for January was three per cent, after hitting a multi-year high of 3.1 per cent in November 2017. Inflation has more than doubled from 1.2 per cent in the last 15 months, largely as a result of the value of the pound plummeting following the Brexit vote in June 2016, making goods costlier to import.
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However, the Bank of England’s chief economist Andrew Haldane said in a speech this week that in some parts of Britain, personal inflation is peaking far higher than the national average.
In South Wales, “personal inflation rates were running at closer to 10 per cent”, said Haldane. “For some, that made for a stark choice between ‘heating or eating’.”
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The Bank of England has an inflation target of two per cent, a goal that just over half of respondents thought was “about right”. Respondents to the survey said they expected an average inflation rate of 2.9 per cent over the coming two years.
Britons think interest rates will increase from 0.5 per cent over the next 12 months, with 58 per cent of respondents saying they expect a rise, though this is down from 63 per cent in November.
The latest survey was carried out between 7 and 18 February 2018.