Inflation fears rise sharply as confidence in Bank of England falls to 22-year low

Bank of England inflation fears rise
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For business sectors that are not allowed to share increased costs with their customers, rising inflation comes directly off the bottom line.

 

A survey undertaken by research company Kantar on behalf of the Bank of England has shown increased anxiety about rising inflation coupled with a loss in faith in the central bank’s ability to control rising prices. The BoE commissioned inflation survey showed that only a third of people said they thought it was doing a good job in keeping prices under control. The 33 per cent satisfaction score is the lowest since the survey started in 1999. The findings were published ahead of next week’s all-important meeting of the Monetary Policy Committee.

According to the survey households believe inflation is becoming more of a problem. The Bank is forecasting the rate to reach circa 4 percent by the end of 2021 before moderating in 2022. During the next five years, the public believe inflation will average 3 per cent a year, up from 2.7 per cent in the May survey and 50 per cent higher than the 2 per cent target set by government.

Analysts expect the Bank to raise interest rates next year.


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