Britons Find Inflation More Sticky: Bank Of England/Ipsos Survey

(RTTNews) - Britons' inflation expectations for the coming year slowed slightly in November but their outlook for the medium-term inflation was higher suggesting that inflation is considered to be more sticky, results of a survey by the Bank of England showed Friday.

The one-year ahead consumer price inflation is seen at 4.8 percent compared to 4.9 percent estimated in August, the latest quarterly Inflation Attitudes Survey conducted by the market research firm Ipsos, on behalf of the Bank of England, revealed.

But respondents raised their inflation forecast for twelve months after one year, to 3.4 percent from 3.2 percent. For the longer term, say in five years' time, the UK inflation outlook was raised to 3.3 percent from 3.1 percent.

Respondents assessed the current rate of inflation in the UK at 9.2 percent, up from 7.6 percent in August.

The survey was conducted between November 4 and 7.

The latest ONS data, which is for October, showed UK consumer price inflation at 11.1 percent, the strongest since October 1981.

The central bank has forecast inflation to peak at around 11 percent in the fourth quarter of this year. The inflation rate is projected to fall sharply to around 5 percent by the end of next year, and return to the 2 percent target in two years' time.

The BoE has been tightening its monetary policy since last December. With the 75 basis point rate hike in November, the bank rate has reached 3.00 percent, the highest since November 2008.

The next monetary policy announcement is due on December 15.

The latest survey showed that the net balance of Britons expecting interest rates to rise over the next twelve months fell slightly to 74 percent from 75 percent.

About 11 percent said they expected rates to stay about the same over the coming year, the same proportion compared to August.

Respondents were asked whether higher, lower or no change in interest rate, which would be 'best for the economy', 20 percent thought rates should 'go up', and 30 percent said rates should 'go down'. About 25 percent were of the view that interest rates should 'stay where they are'.