The medium-term inflation expectations among the British public remained elevated in May, as indicated by a recent Bank of England survey. This survey is particularly significant as it coincides with the central bank’s interest rate decision scheduled for next week. The Bank closely monitors public and investor inflation expectations as these insights help gauge potential wage demands and acceptance of rising prices for goods and services. According to May’s findings, the public’s inflation expectation for five years in the future was steady at 3.6%.
This figure has not changed since February and represents the highest level recorded since November 2019. Additionally, expectations for inflation over a one to two-year period stabilized at 3.2%, marking the highest rate since November 2022. Conversely, the one-year inflation expectation saw a slight decrease, dropping from 3.4% to 3.2%. The Office for National Statistics reported a noticeable rise in consumer price inflation, which increased to 3.5% in April, up from 2.6% in March.
This surge in inflation figures further underscores the concerns regarding price stability as faced by consumers. The survey was conducted among individuals aged 16 to 75 from May 9 to May 13, reflecting a broad segment of the public. These insights into inflation expectations are critical for policymakers as they navigate the economic landscape and make informed decisions that could impact the overall economy. The data highlights the ongoing concerns about inflation, providing a clearer picture of how the public anticipates future economic conditions.