Public confidence in the Bank of England’s ability to control inflation has fallen to its lowest level since records began more than 20 years ago, according to polling data published on Friday.
In the BoE’s survey of public attitudes on inflation, undertaken before the latest official data on price rises, a majority of those answering said they were dissatisfied with the central bank’s performance.
The findings will serve to increase pressure on the BoE, which this week launched a review into its economic forecasting after being criticised by politicians for failing to predict the strength and persistence of inflation.
When asked by polling firm Ipsos on behalf of the BoE, 34 per cent of respondents said they were dissatisfied or very dissatisfied with the way the BoE was setting interest rates to control inflation. Only 21 per cent were satisfied or very satisfied.
The net satisfaction score of minus 13 per cent was the worst rating the BoE has received since the public attitudes survey on inflation was established in 1999.
UK consumer price inflation stood at 8.7 per cent in April, down from 10.1 per cent in March, but significantly above the BoE’s forecast of 8.4 per cent. The official data prompted financial markets to raise their expectations of more interest rate increases by the BoE.
Andrew Bailey, BoE governor, admitted on Tuesday it was “taking a lot longer than we expected” to curb inflation when he was grilled by peers on the House of Lords economic affairs committee.
The BoE has also recently come under fire from Harriett Baldwin, Conservative chair of the House of Commons Treasury committee, for over-optimism in its forecasting of inflation and the risk that it has lost control of efforts to curb price increases.
She said last month that the BoE’s answers to her questions “really worries me and is slightly making me despair”.
The BoE will be reassured by other parts of its public attitudes survey, which showed that the median expectation of inflation over the coming year had fallen from 3.9 per cent in February to 3.5 per cent in May.
But the public expects inflation of 3 per cent in the long term, a full percentage point above the BoE’s 2 per cent target.
The inflation rate for May will be published on Wednesday, a day ahead of the BoE’s next rate-setting meeting.
Economists expect the central bank to raise interest rates from 4.5 per cent to 4.75 per cent, in what would be the 13th consecutive increase by the BoE’s Monetary Policy Committee since late 2021.
On Friday, Tesco said it saw indications of a moderation in inflation, with price rises having passed their peak.
However, Ken Murphy, the retailer’s chief executive, said that “[inflation] does remain stubbornly high”.
