EXCLUSIVE UK public inflation expectations hit record high: GfK – .

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EXCLUSIVE UK public inflation expectations hit record high: GfK – .


People shop at market stalls, with the City of London’s financial district skyscrapers seen behind, amid the coronavirus disease (COVID-19) pandemic in London, Britain, on January 15, 2021. REUTERS / Toby Melville / Files

LONDON, October 22 (Reuters) – A record proportion of the British population believe inflation will accelerate over the next 12 months, according to data that could further strengthen expectations that the Bank of England will hike rates of interest next month.

Some 48% of those polled this month by consumer research firm GfK expected prices to rise faster in the next 12 months, up from 34% in September, according to figures seen exclusively by Reuters .

This was the highest share since records began in January 1985, when Margaret Thatcher was Prime Minister, and more than a decade before the BoE became operationally independent.

The surge in inflation expectations follows a month of soaring gas prices that caused several UK energy suppliers to collapse, leaving households facing the prospect of high bills in 2022.

Global supply chain problems as the global economy reopens due to COVID-19 lockdowns and labor shortages, exacerbated by Brexit, have added to the recent inflationary trend in the Great -Brittany.

The BoE has said it expects inflation to exceed 4%, more than double its target, shortly before slowing down.

Economists increasingly expect the BoE to become the first major central bank to raise borrowing costs – perhaps in its next policy announcement on November 4.

“More and more buyers expect the costs of goods and services to increase dramatically over the next 12 months,” said Joe Staton, director of customer strategy at GfK.

“This rapid increase will have an impact on our ability to shop and save, and on our willingness to spend at a time when our incomes are overtaken by inflation. “

The BoE’s rate-setters are closely monitoring indicators of inflation expectations as they assess the advisability of raising interest rates.

On Sunday, BoE Governor Andrew Bailey said the BoE should act if it sees an increase in medium-term inflation expectations. Last month, the BoE set medium-term inflation expectations in five to ten years. Read more

While the GfK’s gauge of inflation expectations only covers the next 12 months, the scale of the move is likely to catch the attention of members of the BoE’s Monetary Policy Committee. The data is collected as part of GfK’s monthly consumer confidence index, which dates back to the early 1970s. The overall confidence index fell in October to its lowest level in eight months. Read more

“Consumers are already worried about the state of their personal finances. The specter of rising costs can only add to this growing concern, ”Staton said.

Prior to Brexit, GfK price expectations figures were available free of charge as part of the European Commission’s monthly consumer surveys in EU countries, but have not been made public since the start of the year. .

The survey of 2,000 Britons was carried out from October 1 to 13.

Reporting by Andy Bruce; edited by Guy Faulconbridge and William Schomberg

Our Standards: The Thomson Reuters Trust Principles.

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