According to surveys, the British are the most pessimistic about the inflation outlook
According to the Ipsos Mori survey of 29 countries around the world, the UK has the least confidence that financial authorities can quickly control inflation.
The results show that six out of 10 respondents in May thought it would take at least a year for inflation to return to what they believed to be normal levels, with only Swedish respondents showing higher levels.
The figures underpin the Bank of England’s concerns that the UK is currently suffering from an upward spiral in prices and wages, causing consumer price inflation to remain higher for longer.
The central bank hopes that, according to the data to be published on Wednesday, the large decrease in the official consumer price inflation in April will help to change the attitude and alleviate the fear of persistent rapid price increases.
In an Ipsos Mori survey this month, 60 percent of British respondents said they thought it would take more than a year for inflation to return to normal levels, the same as the Netherlands and lower than 64 percent. people in Sweden who shared these fears.
Across all other countries surveyed, an average of 46 percent said it would take more than 12 months for inflation to return.
The result for the UK population is in line with the BoE’s own forecast that inflation will return to the 2 percent target in late 2024 or early 2025.
With high and potentially sticky inflation, UK households were the most dismal of the countries surveyed in terms of their own disposable income.
About 46 percent of Britons surveyed thought that their disposable income – defined in the survey after taxes and living expenses – will fall in the next year.
Mike Clemence, a researcher at Ipsos Mori, said: “British views on the cost of living crisis are significantly more negative than the overall global picture.”
UK households face higher costs and higher taxes as income tax thresholds and reliefs are frozen until 2028, leaving millions to pay income tax at both the main rate of 20 per cent and higher rates.
However, when asked about their standard of living, British respondents were more likely than the global average to say it would fall, but this was not as much of an outlier as for disposable income.
The results from Ipsos Mori provide an insight into the public’s inflation attitudes ahead of the BoE’s next quarterly survey, which will be published in mid-June.
In the February results of the BoE survey, the public was well aware of the increase in inflation, according to the median respondent, inflation in the past year was 9.2 percent, which is close to the applied consumer price inflation of 10.4 percent. in February.
The median respondent expected inflation to be 3.9 percent in the next year, then settle at a rate of 3 percent, still 1 percentage point above the central bank’s 2 percent target.